The use of futures contracts highlights the importance of the existence of futures markets. However, since the beginning, manipulation has been rampant in the futures market (Markham, 1991). Manipulation is to blame as it disrupts two primary functions of the futures market, namely risk transfer and price discovery. Manipulation distorts pricing by imposing improper motivations other than legitimate supply and demand. As a result, manipulation reduces the efficiency of the futures market. The regulators, therefore, should prevent the manipulation from spreading, but it turned out that the regulators were unable to stop the manipulation. The main reason for the failure is that neither the regulations nor the acts have a clear definition of manipulation. The most frequently discussed market manipulation is the “long” manipulation of market power, also known as “corner” or “squeeze” (Pirrong, 2010). This occurs when a trader purchases a large number of futures contracts. The trader, therefore, is able to artificially influence the price by controlling the supply of the commodity of the futures contract. This could impact short sellers. In the futures market, short contracts sell more contracts than the available quantity that can actually be delivered at expiration. It is because contracts are used as hedgers and speculators to transfer risks. These contracts can be netted between short and long. Short contracts must deliver the commodity or pay the differences between the spot price and the futures price at expiration, unless the contracts are netted between the long and short contracts. However, if the big long acts as a monopolist by controlling supply, the shorts would be cornered and pay a distorted amount to the monopolist, meaning that the artificial price with... middle of the paper... e.g. limited level of commodities that non-hedgers can hold up to 25% in the month of supply. This could prevent manipulation of market power like the corner. When a trader buys a large amount of derivatives thus taking a large position, the trader is able to exert his power to move the price as his power would increase with his position. Therefore this rule limits the position held by the trader as well as the ability to manipulate. Furthermore, this prevention helps make the futures market more efficient. (Gwilym and Ebrahim, 2013). On the other hand, Pirrong (2007) agreed to some extent, but Pirrong argued that the limit on speculative position had a negative effect on market efficiency as it "actually reduces welfare". Because speculators are quantitatively limited, hedgers are unable to transfer price risk to speculators, and speculators are unable to absorb price risk.