Note - Match the headings below with the corresponding numbers on the images that follow.
1. Date
The date shown indicates the date which traders last reported their positions to the
CFTC. COT data is released by the CFTC every Friday (occasional changes to release dates take place as a result of public holidays, see releases schedule) and this data relates to positions reported up to close of business on the previous Tuesday. It is the Tuesday date that is shown here.
2. Commercials
The Commodity Futures Trading Commission (CFTC) classify commercial traders as ‘traders that use the futures market primarily to hedge their core business activities’. These traders may be involved in the production, processing, or merchandising of a commodity.
As a result of commercial traders using the markets to hedge their business activities, they are not seeking to directly profit from the markets and as such their positions may seem counterintuitive to many traders. It is important to remember that commercial traders will generally trade against the trend, i.e. increase long positions in a down trend or increase short positions in an uptrend.
This group is of particular interest to traders looking to pick major long term market tops and bottoms because they have superior information to the rest of us. Commercial traders know the markets they trade better than any other trader because they are directly involved with the products or raw materials being traded. In fact they generally own the product that they are trying to sell via the markets. If they believe a market is has become over valued they will sell high quantities, usually ending the prevailing uptrend in the process. The same is also true when a market becomes under valued, commercial traders will buy large quantities ending the prevailing downtrend.
3. Non-Commercials
The Commodity Futures Trading Commission (CFTC) classify non-commercial traders as ‘traders that use the futures market for speculative purposes’. These are traders, such as large private individuals, hedge funds and institutions, who use the markets for speculative purposes with the aim of profiting solely form their trading activities.
It is for this reason that non-commercial traders are typically referred to as ‘trend followers’. They are technically oriented and their trading activity will be generally be in sync with the movement of a market, i.e. they will increase long positions in an uptrend or increase short positions in a downtrend.
Trend traders should look to mimic this groups activities while a market trends, but be mindful of markets reaching extreme highs or lows as being trend followers they typically overdo their positioning and will quickly reverse their positions when the Commercials take control.
4. Non-Reportables
Non-reportable traders are categorised as such because the size of the positions they hold are below the reporting levels for that market as set by the CFTC. The long and short positions shown as "Non-reportable Positions" is derived by subtracting the total long and short "Reportable Positions" (commercial plus non-commercial) from the total open interest. These traders are a mixture of commercial or non-commercial traders but will also contain amateur traders which is why this group rarely gives us any insight into future market direction.
A good general rule of thumb is to do the opposite of what these traders do.
5. Open interest
Open interest is the total of all futures contracts entered into and not yet offset by a transaction, by delivery, by exercise, etc. This should not be confused with volume. Volume represents the total amount of trading activity or number of contracts that have changed hands in a given commodity market over the course of a single trading day, while open Interest is the total number of outstanding contracts that are held by market participants at the end of each trading day.
The aggregate of all long open interest is equal to the aggregate of all short open interest.
6. Open Interest change
This is the total change in open interest from the previous week. If a number such as 6457 is recorded under open interest change then open interest increased by 6457 contracts since the last release, while a figure of -6457 means open interest reduced by 6457 contracts over the same period.
7. Long
Long is the number of contracts that have been bought by each category of trader and are still active in the market.
8. Short
Short is the number of contracts that have been sold by each category of trader and are still active in the market.
9. Net
Net is equal to the number of long contracts - the number of short contracts for each group. This number is important as it tells us if each of the three groups (commercial, non-commercial, non-reportable) are collectively long or short in a market. The Net value for each group is also used to formulate each of the index values you will be presented with within the
COT Charts section.
10. Change
This refers to the change in the Net positions figure for each group from the previous week.
Next - See details of the markets covered by our COT platform
Here.