Autor: Martin Müller

It aggregates the holdings of participants in the U.S. futures markets (primarily based in Chicago and New York), where commodities, metals, and currencies are bought and sold. Traders follow the COT report to identify extreme levels of long or short positions in a currency, which may signal a trend reversal. This report shows the changes in open positions of futures traders, including commercials, small speculators, and large speculators. The COT report gives us a clear understanding of the overall market situation. But it is not a timing instrument and does not give any clear information when to enter the market. We can get insights if a trend will remain, or a reversal is taking place.

The responses to these FAQs reflect only the views of DMO staff, and not necessarily those of the Commission or any other branch or division. The Commission has neither approved nor disapproved of these FAQs, and they have no legal force or effect, do not alter or amend applicable law, and do not create any new or additional obligations for any person. As this showed us the strength of the Canadian dollar, we could use this as a trend move of USD/CAD short. Commitments of Trader Report (COT) is published every week by the Commodity Futures Trading Commission (CFTC). If you wish to have the report update on open, right click on the report and select “Data Range Properties”. The report will refresh the next time you open the file and pull the latest figure from the web.

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While not the group that has the most relevance in the movement of the currency futures short term, at times, their involvement represents a significant share of the total outstanding positions and acts as a key component to monitor. Commercial traders often have deeper knowledge of the markets they trade, as they interact directly with the supply and demand forces driving price movements. When commercial traders increase their long positions, it may indicate that they expect prices to rise, while an increase in short positions might signal an expectation of falling prices.

What Is The Commitment of Traders Report?

The computed amount of spreading is calculated as the number of offsetting futures in different calendar months or offsetting futures and options in the same or different calendar months. Any residual long or short position is reported in the long or short column. Net Noncommercial Positioning is the difference between the short and long open interest of noncommercial traders. Net positioning offers a particularly good measure of CoT data and tends to follow the price action. The COT report released on a weekly basis summarizes the net positions of the most important market participants in the futures market.

CFTC staff does not know specific reasons for traders’ positions and hence this information does not factor in determining trader classifications. Note that traders are able to report business purpose by commodity and, therefore, can have different classifications in the COT reports for different commodities. For one of the reports, Traders in Financial Futures, traders are classified in the same category for all commodities.

How the Commitments of Traders (COT) Report Works

From time to time, the Commission will raise or lower the reporting levels in specific markets to strike a balance between collecting sufficient information to oversee the markets and minimizing the reporting burden on the futures industry. The Commitments of Traders (COT) report is a market report, which is published weekly by the CFTC (Commodity Futures Trading Commission). The COT report gives insights on the positions of different market participants in the US.

1. Reportable traders that are not placed into one of the first three categories are placed into the „other reportables“ category.
2. Other types of traders that will also reveal snippets of valuable information, and as I like to make the analogy, also leave a trail of breadcrumbs along the way, include leverage funds, asset managers, and dealers.
3. The Commission has neither approved nor disapproved of these FAQs, and they have no legal force or effect, do not alter or amend applicable law, and do not create any new or additional obligations for any person.
4. One should not get hung up on individual categories and focus on net positions (long minus short positions) for each group.
5. The strategies may involve taking outright positions or arbitrage within and across markets.

By tracking these trends, traders can gauge when sentiment may be reaching an extreme, which could signal an impending market reversal. According to the calculation by MarketBulls, the 6 month COT Index is currently at % and the 36 month Index at %. The positions of the major market participants are graphically displayed in our COT tool. Here you can see the direction of the trade and receive the necessary COT signals. The market will be in a weakened bullish set-up “if” the two-week trend in commitment of traders forex the large trader position is down, or in other words, if the funds are in the process of liquidating their net long position.

Analyze changes over time

The Legacy Report classifies all traders in commercial, non-commercial traders and non-reportable traders. MarketBulls provides you the graphical and tabular real time and historical Commitments of Traders Legacy Report for each asset above. Furthermore, the COT long format reports show the percent of open interest held by (i) the largest four and (ii) the largest eight reportable traders, without regard to whether they are classified as commercial or non-commercial.

1. When it comes to the COT data analysis, this may serve as the foundation for professional traders to develop effective trading strategies and make informed, prudent decisions at last.
2. The aggregate of all long open interest is equal to the aggregate of all short open interest.
3. Short Noncommercial Positioning represents the short open interest of noncommercial traders.
4. So, ideally, what we want to pay attention to is the bundle of commercials at significant extremes — a lookback of 3y is a good rule of thumb — and sudden changes in positioning.
5. The traders in this category mostly are using markets to hedge business risk, whether that risk is related to foreign exchange, equities or interest rates.
6. For example, if a currency pair shows an overbought condition on a technical indicator like the RSI (Relative Strength Index) and the COT report reveals an extreme long position, this dual confirmation may signal an upcoming bearish reversal.
7. When graphically shown on charts, you actually see what is referred to as the Net Traders Positions which is the actual difference between the number of long positions held by each group minus the number of short positions.

Therefore, in any healthy trend, we should expect commercials sellers to increase on directional moves higher or commercials buyers to dial up their exposure on a directional move to the downside. Every time we analyze the weekly changes in positioning, we want to match off and find congruences between the directional move in price being backed up by an increase in the total number of large specs, especially when in trending markets. If that’s the case, it sends a message that the move carries enough substance to find new legs for a potential continuation the following week/s, with large specs likely sitting on the bid/offer adding to their positions in line with their underlying views.

At the point of checking the classification, the CFTC does not know the specific reasons for the positions of the traders. That could lead to misleading information, because one trader holds different positions of a specific future for different reasons, but is specified in one classification for the whole report. That’s nothing evil, just something to keep in mind on deeper COT analysis. The COT reports provide a breakdown of each Tuesday’s open interest for futures and options on futures markets in which 20 or more traders hold positions equal to or above the reporting levels established by the CFTC. Now, let’s throw into the mix another key category as is the commercial-type accounts, which are the entities commercially engaged in business activities hedged by the use of the futures or options markets.

Some discretion applies as one should put both factors into context with the current dynamics in the price. The COT report can help traders adopt a more patient, long-term approach by focusing on underlying market trends. By reviewing the positions of commercial traders, who are often slower to adjust to market fluctuations but more aligned with economic fundamentals, traders can develop a strategy that captures the broader market direction. Extreme readings in the COT report can provide clues to potential trend reversals. For instance, when non-commercial traders are extremely long, it might suggest that a peak is near, as most traders who are bullish have already bought in. Similarly, an extreme short position can indicate a possible market bottom.