By Marco BösingWhat Is the COT Report?
The COT Report (Commitments of Traders) is a weekly report published by the U.S. Commodity Futures Trading Commission (CFTC) that discloses the aggregate positions of different trader categories in U.S. futures markets. The report is released every Friday and contains data as of Tuesday of the same week.
The CFTC is the regulatory body that oversees futures markets in the United States. It requires large market participants to report their positions. The COT Report is compiled from these filings. The result is a unique window into the positioning of different groups that is not publicly available anywhere else.
For active traders, the COT Report is a valuable tool for determining a weekly directional bias. And the best part: the data is free and accessible to everyone.
How Does the COT Report Work?
The COT Report breaks down open interest by trader group. The three main groups are Commercials (hedgers), Non-Commercials (large speculators), and Non-Reportables (small speculators). For trading analysis, only one group truly matters: Non-Commercials.
Non-Commercials are the large speculators: hedge funds, CTAs (Commodity Trading Advisors), and institutional traders. These players invest millions to find the right market direction. When they change their positioning, there is a reason. Commercials, on the other hand, merely hedge their physical business. They do not care whether the price goes up or down. They are simply protecting themselves. This makes their positioning useless for directional trading signals. And Non-Reportables (small speculators) are simply too small to be relevant.
The key question when reading the COT Report is: Has the net positioning of Non-Commercials increased or decreased from week to week? If large speculators are building their long positions, that is a bullish signal. If they are building short positions, that is bearish. The basic logic is that simple.
One important caveat: the COT Report has a lag. The data is from Tuesday, published on Friday. By the time you read it, the data is already several days old. That means the COT Report is suited for medium-term directional assessments, not precise intraday timing.
Practical Application
A practical example: in the Disaggregated Report for the Euro-Dollar future (6E), I see that dealers have significantly increased their short positions. Dealer logic is inverted: when dealers go short, it means the other side has bought. So a dealer short buildup signals rising prices.
Now I look at what actually happened: the Euro-Dollar did indeed rise the following week. It does not always work immediately. Sometimes price falls first to collect liquidity before moving in the signaled direction. But over several weeks, COT data provides a statistical advantage.
Another important aspect: extreme positioning. When Non-Commercials are more long (or short) than they have ever been historically, that is a warning sign for a potential trend reversal. These extremes build over weeks and months, which makes them particularly meaningful.
I do not use the COT Report systematically every week, but when I take a closer look at a specific market, the CFTC data is a fixed part of my analysis. Read the full article on understanding the COT Report for a step-by-step guide.
Common Mistakes
Using the COT Report for intraday trading. The data is delayed and weekly. If you try to make scalping decisions with it, you are using the wrong tool. The COT Report provides a weekly bias, not an intraday signal.
Weighting all trader groups equally. Commercials and Non-Reportables do not provide directional signals. If you analyze all three groups simultaneously, you dilute the information. Focus on Non-Commercials (or dealers in the Disaggregated Report).
Over-interpreting single weekly values. A single COT data point is a snapshot. The strength lies in the week-over-week change and in looking at trends over multiple weeks. Only when a trend in positioning becomes visible does the signal become meaningful.
FAQ
Where can I find the COT Report?
The COT Report is available for free on the CFTC website (cftc.gov). There are also various third-party websites that visualize the data graphically, making it easier to read. The official raw data from the CFTC is the most reliable source.
Which COT Report is right for me?
There is the Legacy Report (simpler grouping), the Disaggregated Report (more detailed breakdown), and the Traders in Financial Futures (TFF) Report. For forex traders, the Disaggregated Report is most useful because it separately shows dealer positions. For commodity traders, the Legacy Report works well too.
Does the COT Report work for equity index futures?
Yes, the COT Report covers index futures like the E-mini S&P 500 and the Nasdaq 100. The logic is the same: you look at the net positioning of large speculators and derive a weekly bias from it. With index futures, however, arbitrage activity is more pronounced, which can make the signals slightly less clean than with forex futures.