Commodities Trading
The proposal by Commodity Futures Trading Commission head Gary Gensler could be a devasting blow to commodity traders like JPMorgan Chase (NYSE:JPM) and Goldman Sachs (NYSE:GS) which have counted on commodities trading as a major portion of their revenue, which in the case of Goldman Sachs is ten percent of their total revenue over the last several years.
For J.P. Morgan, they said in their recent letter to shareholders that the commodities trading business for the company has more than doubled since 2006.
Two important commodities sectors Gensler wants to put limits on are metals and oil contracts, allowing only double the volume of other commodity investors.
In other carnage Gensler wants to impose on the commodities market, he also is pushing to bring what he is calling more "transparency" to the over the counter trading markets by forcing investors to trade through a centralized, regulated clearinghouse.
Commodities Trading
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