Commitment of Traders (COT) – Overview

A practical guide to reading positioning in futures markets — what the report is, who’s in it, when it’s released, and how to use it alongside seasonality and fundamentals.

1) What is the COT Report?

The Commitment of Traders (COT) is a weekly publication by the CFTC (Commodity Futures Trading Commission). It shows how major trader groups are positioned in futures (and options on futures) markets. Each report reflects positions as of Tuesday’s close and is published on Friday at 3:30 PM ET (normally 21:30 CET/CEST).

Note: U.S. holidays can shift release times. The data always has a three-day lag, but remains invaluable for sentiment and market structure analysis.

2) Trader Groups & What They Do

• Commercials (Hedgers): Producers, merchants, processors, and end-users hedge real exposure and often hold net short positions in commodities. When they move toward net long, it can indicate upside risk.
• Non-Commercials (Large Speculators): Hedge funds, CTAs, banks — trade for profit and amplify trends. Extreme long/short readings can precede reversals.
• Non-Reportables (Small Traders): Retail accounts below CFTC thresholds — typically a small portion of open interest, more “background” sentiment.

3) Why the COT Report Matters

• Smart-money context: Commercials often react first to real supply/demand shifts.
• Sentiment extremes: Crowd positioning by funds at highs/lows often marks late-trend stages.
• Risk timing: Combine with seasonality, WASDE/EIA reports, and VWAP structure for better entries.

4) Open Interest (OI)

Open Interest is the total number of outstanding futures contracts that remain active and unsettled. Rising OI alongside rising prices suggests position building (trend confirmation), while falling OI may hint at exhaustion. Many traders track OI together with COT changes to measure conviction.

5) Minimum Reportable Levels (examples)

The CFTC sets reporting thresholds defining when a trader’s position must be reported. These vary by market and are subject to change.

Note: Thresholds are set by the CFTC and can change. Always verify on official sources.

6) How I Read the COT (in Practice)

• Commercial extremes: Net-long spikes often align with price basing in grains/softs; net-short relief can precede tops.
• Funds & momentum: When large specs are stretched and price stalls, I look for mean-reversion or structure breaks.
• Blend with seasonality: Planting/harvest windows and WASDE/EIA data help time entries beyond direction.

7) Key Metrics & How to Interpret

• Net Position: Net = Long − Short
• COT Index (0–100): Relative position within historical range:

  COT Index = ((Current Net − Lowest Net) / (Highest Net − Lowest Net)) × 100
        

• Net Position Delta: Week-over-week change in net exposure (shows momentum or profit-taking).
• Open Interest: Rising OI = new participation (trend confirmation); falling OI = liquidation or lack of conviction.

8) Example: COT Snapshot (Gold Futures)

Interpretation: Commercials remain net short but are covering part of their hedges (mildly constructive). Large specs have reduced long exposure (waning optimism). Combined with price action, this can indicate short-term correction before continuation.

9) Official Sources & Historical Data

• CFTC – Commitments of Traders (official)
• COT-Trader Analysis – Understanding the COT Report

Disclaimer: Educational content. The COT report is not a standalone signal; combine it with risk management, seasonality, and structure. Always verify schedules and thresholds on official CFTC sources.