Commitments of Traders Report

Commodity Selection: Use the dropdowns to filter by commodity group, subgroup, and name.
Markets Table: View available markets and their exchanges for the selected commodity.
Two-Column Layout: Explore commodities grouped by category, with links to detailed views.

Asset Classes Analysis

1. Commodities

Participants:

Commercials

In commodity markets, commercials are typically the producers, processors, merchants, and users of the underlying commodity.

Crude Oil: Oil producers, refiners, airlines
Gold: Mining companies, jewelers, industrial users
Corn: Farmers, food processing companies, ethanol producers

Non-Commercials

Large speculators like hedge funds and commodity trading advisors (CTAs).

Strategies:

Divergence

If non-commercials are heavily long in crude oil while oil producers (commercials) are increasing their net short positions, it could signal potential overbuying.

Confirmation

If the price of gold is rising and both non-commercials are adding to their net long positions and gold miners (commercials) are reducing their net short positions, it could indicate strong bullish sentiment.

Commercial Capitulation

In a downtrend for corn, if commercials (farmers selling futures to hedge) suddenly start aggressively buying back their short positions, it might suggest they believe prices have bottomed.

2. Financial Futures

Participants:

Commercials

In financial futures, the definition of "commercial" can be a bit broader and often includes entities using these markets for hedging related to their financial activities.

S&P 500 Futures: Investment banks hedging equity portfolios, institutional investors managing risk
Treasury Bond Futures: Bond dealers, insurance companies hedging interest rate risk

Non-Commercials

Primarily large financial institutions and hedge funds speculating on market movements.

Strategies:

Divergence

If non-commercials are heavily long in S&P 500 futures while commercials (e.g., dealers hedging short exposure) are increasing their net short positions, it might suggest caution for the equity market.

Confirmation

If Treasury bond prices are rising (yields falling) and both non-commercials are adding to their net long positions and commercials are reducing their net short positions (indicating less hedging against higher rates), it could support the bullish trend in bonds.

Commercial Aggression

If the stock market has been consolidating, and commercials start building a significant net long position in S&P 500 futures while non-commercials remain neutral, it could signal a potential bullish breakout driven by institutional hedging or anticipation of positive developments.

3. Cryptocurrency Futures

Participants:

Commercials

This category is still evolving in the cryptocurrency space. It can include entities involved in mining, institutional investors with longer-term hedging strategies, or firms facilitating cryptocurrency trading.

Non-Commercials

Primarily institutional investors, hedge funds, and other large entities speculating on cryptocurrency price movements.

Strategies:

Divergence

If non-commercials have built up a large net long position in Bitcoin futures during a price rally, but commercial net shorts are also increasing, it could suggest potential profit-taking or hedging by institutions that might precede a correction.

Confirmation

If Bitcoin prices are rising and both non-commercials are adding to their longs and commercials are reducing their shorts, it could indicate growing institutional interest and support for the uptrend.

Key Considerations for Applying COT to Different Assets

Understand the "Commercial" Definition

The exact nature and motivations of commercial traders will vary significantly depending on the asset class. It's crucial to understand who these players are in each specific market.

Market Dynamics

Different asset classes have unique fundamental drivers and speculative influences. The effectiveness of specific COT strategies might vary.

Data Availability

Ensure that the CFTC publishes a COT report for the specific asset you are interested in. Not all individual stocks have associated futures contracts with COT data.

Combining the analysis of Commercial and Non-Commercial trader positioning in the COT report can offer powerful insights into potential market dynamics and trading opportunities.

The Core Idea: Understanding the Counterparty Relationship

Commercial traders (hedgers) often act as the natural counterparties to Non-Commercial traders (large speculators). When speculators are aggressively buying (net long), commercials might be selling (net short) to hedge their exposure. Conversely, when speculators are heavily selling, commercials might be buying.

1. The "Smart Money vs. Dumb Money" Approach

The Idea: Commercials are considered the smart money due to their fundamental market knowledge.

Look for significant divergences in net positioning.
Bearish Signal: Speculators are heavily net long while commercials are net short.
Bullish Signal: Speculators are heavily net short while commercials are net long.
Wait for price action to confirm divergence signals.

Example: A large net long position by speculators while commercials go net short may signal an overextended bullish move.

2. Following Commercial Confirmation of Speculative Moves

The Idea: Commercial participation in the same direction as speculators validates trends.

Bullish: Uptrend + increasing non-commercial longs + decreasing commercial shorts.
Bearish: Downtrend + increasing non-commercial shorts + decreasing commercial longs.

Example: Both groups aligning in long positions during a price rise may indicate a strong uptrend.

3. Identifying Potential Trend Changes Based on Commercial Capitulation or Aggression

The Idea: Large commercial shifts may hint at trend reversals or new trend formations.

Capitulation: Commercials suddenly turn long in an extended uptrend.
Aggression: Commercials build long positions after a downtrend.

Example: A bearish trend seeing a sudden buildup of commercial longs might precede a reversal.

4. Using the Spread Between Commercial and Non-Commercial Net Positions

The Idea: The spread between the two groups’ positions can signal sentiment extremes.

Widening positive spread = potential overbought conditions.
Widening negative spread = potential oversold conditions.
Narrowing spread = potential consolidation or sentiment shift.

Example: A rapidly widening non-commercial long vs. commercial short spread may warn of excessive bullishness.

Key Considerations

Context is Crucial: Use COT data with price action and fundamentals.
Magnitude Matters: Historical deviations carry more weight.
Rate of Change: Rapid shifts often indicate sentiment changes.
Market Specifics: Behavior varies across commodities and instruments.
Timeframe Awareness: COT data is best suited for swing or position trading.

By observing commercial and non-commercial positioning, you can better understand market sentiment and identify higher-probability opportunities. Always refine your strategy based on experience and market nuances.

Summary

The principles of analyzing the relationship between Commercial and Non-Commercial traders in the COT report are broadly applicable across various asset classes. By understanding the specific roles of "commercial" players in each market and observing the divergences, confirmations, and shifts in their positioning relative to large speculators, traders can gain valuable insights to inform their trading decisions in stocks (via index futures), commodities, and even cryptocurrencies (via futures contracts).

For more detailed information, refer to the official CFTC documentation or contact support.