Introduction to the COT Report
The Commitment of Traders report is published every week by the CFTC. It reveals how large institutions are positioned — information retail traders rarely know how to use.
What Is the COT Report?
The Commitment of Traders (COT) report is published every Friday by the US Commodity Futures Trading Commission (CFTC). It discloses the net long and short positions of three groups of traders in futures markets, including currency futures — a transparent proxy for positioning in spot forex.
The Three Groups
Commercial Traders (Hedgers): Corporations and institutions using futures to hedge currency exposure from their core business. They are contrarian by nature — they sell currency futures when their business makes them long the currency (e.g., a US exporter hedging future dollar receipts).
Non-Commercial Traders (Large Speculators): Hedge funds, commodity trading advisors, and large speculative traders. These are the "smart money" you want to follow. When large speculators are at extreme net long positions, currencies tend to be near peaks. When extreme net short, near troughs.
Non-Reportable Positions (Small Speculators): Everyone below the reporting threshold — often called "dumb money." Their positioning is often a contrarian indicator, peaking at the wrong time.
How to Read the Data
The COT report provides the number of long and short contracts for each group. The key number is net position = longs – shorts. Tracking this week-over-week tells you whether positioning is building or unwinding and at what extremes.
Extreme positioning (multi-year highs or lows in net non-commercial positions) is a potential contrarian signal — not a timing tool, but an important context layer when combined with technical analysis.