Earlier this week, NYSE Liffe – the global derivatives branch of the NYSE Euronext group – met with a group of disgruntled cocoa industry customers, who are upset about what they see as excessive speculation on London markets.
As a case in point, many cite the Armajaro affair, in which a London commodities hedge fund took physical delivery of over 240,000 tons of cocoa beans when it held its July futures contracts to expiry.
The largest delivery in almost 14 years, Armajaro’s actions sparked worldwide mainstream media coverage of the commodity futures business and prompted comparisons between Bond villain Goldfinger and Armajaro founder Anthony Ward, who has built up a reputation for bold and risky investments.
Some market watchers expect NYSE Liffe to put position limits on its commodity futures products, although the exchange said it had not come to any firm decisions yet.
It did, however, say that no rules were broken in trading for the July contract.
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