– John Kemp is a Reuters columnist. The views expressed are his own —
Both Goldman Sachs and Morgan Stanley reduced the size of their commodity trading books during the third quarter, according to their latest filings on Form Y-9C (“Consolidated Financial Statements for Bank Holding Companies“):
While the gross fair value of physical commodity inventories held on their balance sheets rose — sharply in Goldman’s case — the gross fair value of the commodity contracts was down.
Most of the shrinkage came from smaller positions in exchange-traded futures contracts, as well as a reduction in over-the-counter (OTC) options. OTC swap positions also fell.
But the gross notional value of forwards was little changed.