Yarilet Perez is an experienced multimedia journalist and fact-checker with a Master of Science in Journalism. She has worked in multiple cities covering breaking news, politics, education, and more. Barchart is committed to ensuring digital accessibility for individuals with disabilities. We are continuously working to improve our web experience, and encourage users to Contact Us for feedback and accommodation requests. Short and Long Format of ReportsThe Legacy and Disaggregated reports are available in both a short and long format.
If a trader’s open interest is greater than 200 contracts, he or she must declare status as a commercial or noncommercial. Floyd Upperman is recognized as the foremost analyst of Commitment of Traders data. Trained in the use of data analysis in problem solving, he uncovered the unique value of COT data as a powerful market indicator.
If the open interest is skewed (meaning the long position held by “managed money” is much greater than the short position), there is a chance of a rush to the door to exit quickly. The market might be poised for a short squeeze if the “managed money” short position is much larger than the long position. Access Weekly Commitments of Traders Reports, as well as trade analysis and recommendations for various markets, daily fundamental and technical market overviews, future price outlooks, and more through our Insider Market Advisory. There are the Non-Reportables, probably people like you…people who are trading in smaller amounts; the average trader.
The https://forexdelta.net/, or COT, report is a weekly publication that shows the aggregate holdings of different participants in the US futures market. It provides a snapshot of trading commitments as of Tuesday of that week in order to increase the transparency of exchanges. Forex traders may use currency derivatives COT reports to find large net long or net short positions. This chart shows the dealer short position as a percent of total long and short positions. The scale is inverted so low short positions are at the top of the chart and high short positions at the bottom.
You may choose to look at the EasyLanguage code for each function to develop a better understanding of how to use the underlying reserved words. Note that these functions allow you to access fundamental fields from other data streams, such as ‘of Data2’. This is an easy and flexible way to plot virtually any fundamental COT values . The percentage short position by asset managers on October 11th was the highest since 2016.
By posting material on IBKR Campus, IBKR is not representing that any particular financial instrument or trading strategy is appropriate for you. Notice that the Red bars are all pointing down, which indicates that the Commercials are all selling, or going short. Notice that the Blue bars are all facing up, which means the Large Speculators are buying, going long in the market. Basically, the Red guys, the big Commercials are selling their contracts to the Blue guys, the Big Speculators. Look at the little Green guys, they are the Small Speculators, guys like you and me, who are also going short, or selling, that’s why their bars are all facing down too. I first learned about the importance of the Commitments of Traders Reports from Bill Meehan.
COT reports provide a breakdown of each Tuesday’s open interest for markets in which 20 or more traders hold positions equal to or above the reporting levels established by the CFTC. Many speculative traders use the Commitments of Traders report to help them decide whether or not to take a long or short position. One theory is that “small speculators” are generally wrong and that the best position is contrary to the net non-reportable position. Another theory is that commercial traders understand their market the best and taking their position has a better chance of profit (which is pretty much the same thing as the “small speculators” being wrong). The disaggregated COT report is another one that is commonly known by traders. It provides a deeper breakdown of the market participants, splitting commercial traders into producers, merchants, processors, users, andswapdealers.
Usually, Dealer short positions hover around 70 or 80% but at market lows it drops down to 30% or 40%. The correlation here is similar to that of the asset manager but in a positive way. The lowest short position was on September 13th, which was right near the market low.
If commercial and non-commercial long positions are both growing, for example, that is a bullish signal for the price of the underlying commodity. It is a core data source for traders and for most academic research on pricing trends in the futures market. That said, it does have its critics and their issues with the report are justified.
I wrote the first book ever on the COT Report, “Trading with the Insiders”, Wiley. I have taught more people how to use the data from this report than anyone else. Unless otherwise stated, the copyright and any other rights in the contents of the material available on the LME website, including any images and text, shall remain the property of the LME. No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination.
There are many different ways to analyze the reports, but we believe that for the most part the large traders’ net position and “change in position” over a two week period are the most important numbers to watch. Keep in mind that the small trader’s net position is usually vulnerable to either long liquidation or short-covering if the market starts to move against them. Because the COT measures the net long and short positions taken by speculative traders and commercial traders, it is a great resource to gauge how heavily these market players are positioned in the market. While the position data is supplied by reporting firms, the actual trader category or classification is based on the predominant business purpose self-reported by traders on the CFTC.
Both reports can be displayed in AgenaTrader and used for semi-automated trading as well as for analyzing and realtime-scanning the markets. The COT report is not only interesting for futures trading, but is also ideally suited for swing-trading with IndexCFDs, CommodityCFDs and Forex. The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.
References to exchange-traded futures and options are made on behalf of the FCM Division of SFI. Open interest held or controlled by a trader is referred to as that trader’s position. For the COT Futures-and-Options-Combined report, option open interest and traders’ option positions are computed on a futures-equivalent basis using delta factors supplied by the exchanges. Long-call and short-put open interest are converted to long futures-equivalent open interest. Likewise, short-call and long-put open interest are converted to short futures-equivalent open interest.
He skillfully explains how to break down the COT data into producers, consumers, and funds so you understand the positions and activities of these key market participants. A weekly report from the CFTC providing a breakdown of each Tuesday’s open interest for markets in which 20 or more traders hold positions equal to or above the reporting levels established by the CFTC. Open interest is broken down by aggregate commercial, non-commercial, and non-reportable holdings. The Commitments of Traders reports can sometimes give traders a good idea of future significant moves in the market.
We’re also a community of https://traderoom.info/ that support each other on our daily trading journey. I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. Producers/merchant processors are more likely to hold on to their positions as they are usually a hedge to their underlying production.
Customized data report results can be downloaded to available formats — CSV, RDF, RSS, TSV, or XML. There are a set of reserved words that may be used to retrieve values for fundamental COT data fields and error status for Data1. These words can be used as inputs with Custom 1, 2, 3, and 4 Line indicators to directly display values in charts and grids in addition to using the words in your own EasyLanguage statements.
The https://forexhero.info/ receives the data from the reporting firms on Wednesday morning and then corrects and verifies the data for release by Friday afternoon. Lists of the COT data fields are organized as they would commonly appear on their respective CFTC reports. The short position by dealers on September 13 was the lowest in history. The reports are available in either long or short format from the CFTC web site.
Most traders know that the Commitment of Traders essentially is a report of the open interest held by the major categories of traders. Despite this basic knowledge, there seem to be some pervasive misconceptions about the report when it comes to understanding the relationship between the market and these categories of traders. Finally, I’m going to show some ways you can understand the role of each of the major players in a specific market, using this knowledge to build some useful indicators. A classic bearish set-up in the market exists if large traders are holding a net short position with small traders net long the market .
Weekly Commitments of Traders report will be delayed until all trades can be reported. Significant changes in volume, especially by swap dealers, indicate that liquidity is likely rising or falling. The Commitments of Traders Report is a valuable report that is made available by the regulatory authority – the CFTC – once a week. Access comprehensive research and free trial news subscriptions available through IBKR’s trading platforms.
Open interest is the total of all futures and/or option contracts entered into and not yet offset by a transaction, by delivery, by exercise, etc. Due to legal restraints , the CFTC does not publish information on how individual traders are classified in the COT reports. A set of supplied functions are also available for use in your own EasyLanguage statements that can be used to return the COT data value and error status in one call. These functions require that you declare a variable in your EasyLanguage code and understand the use of output parameters.
They are buying or selling only to speculate that they will exit their position at a profit, and plan to close their long or short position before the contract becomes due. In most of these markets the majority of the open interest in these “speculator” positions are held by traders whose positions are large enough to meet reporting requirements. The information categorizes volume and open interest on futures contracts by trader type. While the information is objective, the analysis can be used as a sentiment index to help traders make commodity hedging and trading decisions. If you want more information about cobalt futures contracts or hedging your battery raw material risk, contact our risk solutions team.
Bill had been a member of the Chicago Board of Trade, and in 1969 revealed the basic secrets of these reports to me. Along the way, I invented some ways to make it easier to see the impact of these guys by making mechanical indicators with the data. I’ve been using them for over 40 years now and think you’ll find them to be invaluable tools. The COT report has become a major forecasting tool for traders and advisors around the world.