Mike Norman, anchor, HardAssetsInvestor.com (Norman): Hi, everybody. This is Mike Norman, your host here at HardAssetsInvestor.com’s interview series. I’m here for the second part of my interview with John Woods, who’s vice president at McNamara Options.

John, I want to talk a little bit about the political or the regulatory climate. Because what we’re seeing now, in response to the last several years of lots of volatility in the oil market ... not just oil markets, but in commodity markets in general, commodities becoming really embraced as an asset class, a lot of investment money flowing in, legislation out of Washington or regulatory measures to, perhaps, curb this speculation.

We’re seeing, now, the CFTC proposing position limits for speculators, and defining, I think, with more clarity, who exactly is a bona fide speculator. Now, some people say that what’s being proposed now, or what’s going to come out of this, is a very watered-down ... I mean, there are going to be position limits that basically just reflect the positions people already have on. Do you think there will be an impact, and that maybe this is the first step? We’ll get more regulatory measures, ultimately, maybe, taking some of this speculation out of the markets? Do you think that’ll happen?

John Woods, VP, McNamara Options (Woods): Well, I think what they’re trying to do is regulate these rogue traders that just pile on positions. There’s nothing wrong with putting limits on people. Because if you put a limit on a person, they're going to say, “All right, you need “x” amount of capital to carry this position.”

Like me, when I trade, I have “x” amount of dollars to carry my positions. I can’t arbitrarily just say, “Buy this and buy that” if I don’t have the money to back it up. You have to be accountable to what you're trading. So, you just can’t go out there and say, “You know what? Buy and buy and buy.”

Norman: How much of an influence do you see, as somebody who’s really a day-to-day market participant, from these big, sort of, long-only, passive investment funds, the flow of investment money, people who just want to buy and hold natural gas or crude oil? Do you see that? I mean, is that obvious to you?

Woods: Well, it is. I mean, you see these big funds come in here and just buy with reckless abandon. And, you look at it like, “What are they thinking?” And, it’s just one more part of our market. I mean, these guys are here. They're going to stay here. And if you regulate them, you're just going to make them accountable to what they're trading.

Norman: Now, you work with people in the trade. Do you buy their argument that, if you put limits on this, if you start to regulate this above the degree of regulation we have right now, that it’ll make their business more difficult? Do you buy that?

Woods: You know what? In one respect, yeah. If you start saying, “You can only do “x” amount,” I mean, this is capitalism. If you can back it up, you can do it; you can trade it. So, to put these caps on these people, it’s really hindering them. It’s really hindering their ability to make money. And honestly, how is that fair?