The Commitment of Traders report breaks down who holds what in the futures market. It is published every Friday by the CFTC, reflecting positions as of the previous Tuesday. That three-day lag is the first thing to understand about it: this is context, never a trigger.
The three groups
- Commercials - producers and consumers hedging real exposure. They lean against trends by nature, because they are hedging, not speculating.
- Large speculators - funds and managed money. They follow trends and their positioning is the crowd you usually care about.
- Small speculators - retail. Historically the least useful group, and the one most often at extremes near a turn.
What to actually look at
Absolute numbers mean little because open interest changes over time. What carries information is where positioning sits relative to its own history - a three-year percentile is the usual measure - and, more importantly, the rate of change. Positioning unwinding fast tells you more than positioning sitting still at an extreme.
How it fits the rest
The honest role for COT is as a third filter. The rate differential says which direction deserves the benefit of the doubt. Price structure says where the trade is. Positioning tells you how much of that move the crowd has already taken, and therefore how much room is realistically left.
Positioning does not tell you when. It tells you how crowded the trade already is.