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July Robusta coffee ‘squeeze’ and MiFID II

The FT has reported (here) that a dealer has amassed a large position in the August Robusta coffee contract, which has caused the spread between the July and September contracts to significantly rise. It is alleged that this activity may be part of an “abusive squeeze”, a practice where a market participant buys up a large part of a near delivery month in order to “squeeze” short sellers.

This comes at a time when there is a great deal of debate about the position limits under MiFID II, which could well outlaw the accumulation of such a position. The rules are intended to prevent manipulation such as that which is alleged. The final Regulatory Technical Standards are due in September.

About avivhandler

Aviv is the Managing Director of ETR Advisory, a niche consultancy focused on the regulation of the commodity, energy and financial markets. He has more than 23 years of experience in the financial, energy and commodity markets, covering regulatory compliance, credit, risk and financial technology. Prior to founding ETR, he was Partner at SunGard Global Services, where he built a Centre of Excellence in European Energy and Commodity Regulation. Before that, he founded Coherence, a consulting firm specializing in credit risk in commodity and energy trading as well as software product management. The credit practice ultimately became part of Sirius Solutions, where he was the Managing Director of Europe. He has also held management roles at KWI and Iris Financial, among other organizations. Mr. Handler holds a degree in computer science from Imperial College, University of London.


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