The COT report explained: how to read futures positioning

The Commitments of Traders (COT) report is published by the US Commodity Futures Trading Commission (CFTC). It breaks down open interest in futures and options on futures markets, showing how contracts are held by different groups of traders on the Tuesday of each week. The CFTC covers markets in which 20 or more traders hold positions at or above its reporting levels (CFTC, Commitments of Traders).

When it is published

The reports are generally published each Friday at 3:30 p.m. Eastern Time, using data from the Tuesday before. Holidays can change the schedule, so check the CFTC calendar in a week with a US holiday.

The trader categories

• Legacy report: splits reportable open interest into non-commercial and commercial traders.
• Supplemental report: adds index traders as a third group.
• Short format: shows reportable and non-reportable positions separately.

The CFTC assigns traders to these groups on the predominant business purpose they report on CFTC Form 40. Staff do not consider why a trader holds a position, so a group label describes the reported purpose, not the strategy behind each trade.

Reading it with care

Traders often follow how the net position of a group changes over several weeks. A very large position in one direction can be described as crowded, but the report does not say when that crowding will unwind. Two cautions apply. The data is three days old by the time it is published, from Tuesday to Friday. It also covers futures, not the spot forex market where most retail trades are placed.

Use the report as context next to price structure, the economic calendar and your own risk limits, rather than as a trigger on its own.