Commitments of Traders Guide

• Commercial (reportable) - these are positions by companies involved in the production, processing and sale of a commodity. They use futures contracts primarily for hedging e.g. mining, oil and gas companies. These companies also meet the reportable requirements set by the CFTC
  
  
• Non-Commercial (reportable) - these are positions by companies such as hedge funds who use futures markets for speculative purposes. These companies also meet the reportable requirements set by the CFTC
  
  
• Non-Reportable - these are long and short positions that do not meet reportable requirements set by the CFTC

• Stock Market COT Summary Report
• Forex COT Summary Report
• Energies COT Summary Report
• Metals COT Summary Report
• Softs COT Summary Report
• Bonds COT Summary Report

• Net Non-Commercial Commitment Changes
• Reversals in Net Non-Commercial Commitments
• Net Non-Commercial Overbought/Oversold Commitments
• Change in Open Interest

Change in Open Interest	Price Changes	Signal
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Change in Open Interest:

This is the difference between the total Open Interest in this report and the previously published report.

Changes From:

Changes represent the differences between the data for the current report date and the data published in the previous report.

Commercial:

A Commercial Firm/Trader is one that buys or sells futures primarily to hedge a genuine exposure to the underlying market, i.e. a firm that is "...engaged in business activities hedged by the use of the futures or option markets." Examples may include mining companies hedging against a potential price fall, airlines hedging against crude oil price increases or a company hedging against the changing valuation of its host currency. Also see 'Reporting Firms' and 'Non-Commercial'.

Alternatively, as Investopedia puts it "An increase in commercial traders' long positions in a certain commodity may mean these traders believe the price of the commodity will increase".

Commitments:

Also known as positions. These are the currently open contracts listed within the specific categories of trader/trade type. Also see Open Interest.

Contract:

The term describing a unit of trading for a commodity future or other derivative; (2) an agreement to buy or sell a specified commodity, detailing the amount and grade of the product and the date on which the contract will mature and become deliverable.

Contract Market Code:

The CFTC code for the market e.g. 88691 is the code for Gold (Commodity Exchange Incorporated) and 43602 is the code for 10-Year US Bonds (Chicago Board of Trade).

Contract Size:

The actual amount of a commodity represented in a contract.

Date:

The date of the data in the report, this is normally a Tuesday. This should not be confused with the publication date which is generally 3 days later on the Friday.

Futures Only Positions:

This is to clarify that this is a 'Futures-only' report. The CFTC also releases other reports such as a 'Futures and Options' report. On Clean Financial we primarily review the Futures-only report.

Long:

A bought futures contract which opens a market position. Traders with a Long position think the market will rise. Also see Open Interest.

Long/Short Commitments Ratios:

This is not listed on the COT reports on the CFTC.gov website but it is derived from the same data. This has been added to the CleanFinancial report so it is easier to see the number of Long vs Short commitments. It is simply a ratio of the number of Long positions (commitments) to the number of Short positions (commitments).

Market:

The name of the market. Note that in these reports, Forex futures markets are traded against the US dollar.

Market Code:

This is the code of the futures market (exchange) e.g. CBT (Chicago Board of Trade), CME (Chicago Mercantile Exchange), CMX (Commodity Exchange Incorporated), ICUS (Ice Futures US), IFED (Ice Futures Energy Division), NYME (New York Mercantile Exchange) etc.

Net Commitments Change:

This is not listed on the COT reports on the CFTC.gov website but it is derived from the same data. This has been added to the CleanFinancial report so it is easier to see the overall change in commitments and therefore if, over the last week, traders are getting net longer/shorter of a market.

Net Commitments = Long Commitments - Short Commitments

Net Commitments Change = Change in Long Commitments - Change in Short Commitments

A positive number in the Net Commitments Change indicates that positions are net longer over the last week. A negative number indicates that positions are net shorter over the last week.

The Net Commitments Change often focuses on the Non-Commercial positions in order to give a trading signal on the whether the market is getting more optimistic or pessimistic.

The formula works the same way, i.e.:

Net Non-Commercial Commitments = Long Non-Commercial Commitments - Short Non-Commercial Commitments

Net Non-Commercial Commitments Change = Change in Long Non-Commercial Commitments - Change in Short Non-Commercial Commitments

Non-Commercial:

A Non-Commercial Firm/Trader is one that mainly buys or sells futures in a speculative manner. i.e. a firm that is speculating and not hedging a genuine exposure to the underlying market. Examples may include hedge funds and some large financial institutions. Also see 'Reporting Firms' and 'Commercial'.

Alternatively, as Investopedia puts it, "If non-commercial traders (speculators) have a substantial number of short positions, it can be inferred that this group of investors believes the price of the underlying asset is going to decrease.

Non-Reportable:

Positions taken but not through a 'Reporting Firm'.

According to the CFTC, "the long and short Open Interest shown as 'Non-Reportable Positions' is derived by subtracting total long and short 'Reportable Positions' from the total Open Interest. i.e.:

Non-Reportable Positions (Long) = Open Interest - Non-Commercial (Long) - Commercial (Long) - Spreads
Non-Reportable Positions (Short) = Open Interest - Non-Commercial (Short) - Commercial (Short) - Spreads

This means that positions held by 'Non Reporting Firms' could be Commercial or Non-Commercial, the classification is unknown.

Number of Traders in Each Category:

See 'Total Traders'.

Open Interest:

These are currently open contracts that have not been delivered, offset, expired, or otherwise closed. Open Interest held by a trader is referred to as that trader's position.

For more details please see the full official definition of Open Interest.

Open Interest is the total Reportable and Non-reportable long positions, it is also equal to the total Reportable and Non-reportable short positions:

Open Interest = Total Reportable (Long) + Non-Reportable (Long)
Open Interest = Total Reportable (Short) + Non-Reportable (Short)

Percent Of Open Interest For Each Category Of Trader

The percentage of Open Interest in each category of trader/trade type. Percentages of less than 0.05% are shown as 0.0%. Because of rounding, the total may not be 100%.

Reporting Firms:

The collective term for Clearing Members (e.g. Chicago Mercantile Exchange Inc. or LCH.Clearnet Ltd), Futures Commission Merchants (e.g. Barclays Capital Inc or Goldman Sachs & Co.) and Foreign Brokers with at least one open position that is larger than, or equal to, the Reporting Level in that market.

Reporting Level:

The size of position set by an exchange and/or the CFTC above which a firm/trader must provide daily reports of all open positions held in that market. These levels can, and do, change. However, the levels remain large e.g. as of March 2015 for the GBP market, the reporting level was £25m (or 400 contracts of £62,500 each) and for gold the reporting level was circa $24m (or 200 contracts of 100 troy ounces).

Reporting Traders:

A trader, at a Reporting Firm, with at least one open position that is larger than, or equal to, the Reporting Level in that market.

Short:

A sold futures contract which opens a market position. Traders with a Short position think the market will fall. Also see Open Interest.

Spreads / Spreading:

Spreads, also known as Spreading, measures the extent to which each Non-Commercial trader holds equal combined-long and combined-short positions. For example, if a Non-Commercial trader in Euro Dollar futures holds 3,000 long contracts and 2,000 short contracts, then 1,000 contracts will appear in the "Long" category and 2,000 contracts will appear in the "Spreads" category. These figures do not include intermarket spreading, such as spreading Euro Dollar futures against Treasuries futures.

'Spreads' on a COT report should not be confused with 'spread betting' or the word 'spread' when it is used to define the difference between the buy and sell price of a market.

Total Reportable

The total long and short Open Interest in a given market held by Reporting Firms/Reporting Traders.

According to the CFTC, "If, at the daily market close, a reporting firm has a trader with a position at or above the Commission’s reporting level in any single futures month..., it reports that trader’s entire position in all futures...in that commodity, regardless of size.

"The aggregate of all [reporting] traders’ positions reported to the Commission usually represents 70-90% of the total Open Interest in any given market."

Total Traders / Number of Traders in Each Category:

To determine the total number of reportable traders in a market, a trader is counted only once whether or not the trader appears in more than one category.

To determine the number of traders in each category, however, a trader is counted in each category in which the trader holds a position. Non-commercial traders may be long or short only and may be spreading. Commercial traders may be long and short.

The sum of the numbers of traders in each category, therefore, will often exceed the number of traders in that market.