COMMENT 

The Honorable Michael V. Dunn 

Acting Chairman 

Commodity Futures Trading Commission 

Dear Mr. Dunn; 

C. F. T.C. 

OFFICE OF THE SECRETARIAT 

2009- APR 2 Prlll ea 

I am writing to you in your roll as head of the CFTC in the hope that you will consider 

my request. That request is that the CFTC consider banning block trading for all 

Greenhouse Gas Emission (GHG) contracts as defined by the Chicago Climate Exchange 

(CCX) and the Green Exchange. 

Lest you think I am simply some disgruntled nut with a vendetta, my trading background 

shows that I am qualified to at least state my concerns re this practice. I am currently the 

Managing Member of Universal Carbon Fund (UCF), LLC, a commodity pool that trades 

on the CCX in GHG (carbon, So2, Reggi). I am also a member of the CME as the 

Managing Member of Gressel Produce LLC. I have been a member of the CME since 

1976 trading for my own account as a local. During that time I've served on numerous 

committees, most actively those dealing with pit supervisory and floor practices. In 

2005, I became a "liquidity provider" on the CCX and continue to maintain that role 

today through UCF. 

My views on banning block trading stem from the following reasons: 

1. The level field of trading and transparency, in which we take pride and 

consciously tout to all, is non-existent in block trading. By definition, block 

trading is a pre-arranged trade of which the rest of the marketplace is unaware 

until it becomes a "fait-accompli." As a result, there are many advantages 

accrued to the participants that work to the detriment of the rest of the market. 

For example; Party A is approached with an offer by Party B to sell a commodity 

below the current bid. Party A can then better the offer of Party C (who is 

currently making the transparent screen offer), or sell the bid of Party D (who 

does not see the block offer). Whichever way Party A chooses to go, both 

unknowing parties are at a disadvantage. Thus, these block trades are freezing out 

the rest of the marketplace. Both bids and offers can be, and are, violated. 

2. Block trades affect the health of the market as a whole. The often quoted 

argument for block trading is that there is not enough liquidity. However, block 

trades starve the rest of the market of liquidity. This case is more so in new 

markets than in older, established markets. I feel that block trades are an 

impediment to growth because 1 00 cars mean more to a market when the total 

volume is 200 cars a day vs. 2000. 

3. By its very nature block trading smacks of lack of market integrity. Because, by 

nature, this is a pre-arranged trade, there can be variables that are totally unrelated 

to actual market conditions. For instance, the perception of the old "sell me this 

here and I will make it up to you somewhere else" that we've worked so hard to 

in the past to avoid. Block trading in its purest form does not lend themselves to 

market integrity. At the very least, properly monitoring them would require an 
additional regulatory burden that to my knowledge is currently not under 

consideration. 

I have previously voiced my objections to the practice of block trading to representatives 

of the CCX where I trade. I have been told they are forced to condone and enable this 

practice due to competitive pressures. Although I have not spoken to anyone at the Green 

Exchange, I am confident I would receive an identical answer from them, as well. 

It is for all these reasons, and more, that I believe block trading should be banned on all 

US exchanges for GHG contracts. Due to space considerations, I have merely touched 

the surface of my concerns over this practice, but would welcome a follow-up 

conversation about them. I can be reached during trading hours at 602-374-3885 or after 

hours on my cell at 312-543-5277 or at any time at my e-mail below. 

Sincerely, 

Joe Gressel 

joe@gressel.net