COT Report. Usage Guide

COT REPORT (Commitments of Traders Report) 

Definition. COT is a weekly CFTC report showing the structure of open positions in futures and options on US exchanges (CME, ICE). Data is compiled as of Tuesday and published on Friday. The report indicates who holds open risk in the market.

Full list of participants in Disaggregated COT format

Category	Who they are	What they do	How to interpret them
Producer/Merchant/Processor/User	Real companies (exporters, importers, producers)	Hedge business risk	Often counter-trend at extremes
Swap Dealers	Large banks and financial intermediaries	Transfer client risk	Reflect client demand structure
Managed Money	Hedge funds, CTAs	Active speculators	Most trend-following group
Other Reportables	Large, but unclassified participants	Various strategies	An auxiliary signal
Non-Reportable	Small players	Small positions	Least informative

In the classic format, these groups are aggregated into Commercials, Non-Commercials, and Non-Reportable. For Forex, the Managed Money / Non-Commercials category is key.

Key COT indicators and their meaning

Long Positions — number of open buy contracts. Shows the volume of bullish bets.

Short Positions — number of sell contracts. Reflects bearish bets.

Net Position — Long – Short. A positive value means a net bullish bias, a negative value means a bearish bias.

Open Interest (OI) — total number of open contracts in the market; indicates liquidity and capital involvement.

Change in Position (Δ) — weekly change in positions; reflects the speed of large players entering or exiting.

Example table (EUR 6E)

Indicator	Value	Explanation
Long (Managed Money)	185,000	Funds hold 185k buy contracts
Short (Managed Money)	95,000	95k contracts short
Net	+90,000	Pronounced bullish bias
Open Interest	430,000	High liquidity and activity
Δ Net (week)	+15,000	Active accumulation of longs

Long ↑ + OI ↑ means new money is entering longs and the trend is structurally confirmed. Short ↑ + OI ↑ means strengthening bearish pressure. Net at historical highs signals overheating. A decrease in Net while the price rises indicates divergence.

Example 1 — Trend Confirmation (EURUSD)

ECB signals hawkish policy, EURUSD rises. COT shows Net Non-Commercials: +40,000 → +75,000 → +110,000 over three weeks. Open Interest rises. Interpretation: funds are actively entering longs, the trend has structural support. COT is used as a filter — we only trade in the direction of the trend.

Example 2 — Extremes and Reversal Risk

EURUSD has been rising for four months. Net = +170,000 (5-year historical high). Δ Net begins to decrease, although the price makes a new high. Interpretation: funds are maximally loaded long, new buyers are scarce, a distribution phase is beginning. A deep correction forms within 2–4 weeks.

COT as an "order book" for Forex

Forex is a decentralized market, so a complete exchange order book does not exist. There is no single center where all limits and positions are visible. That's why COT becomes a unique tool: it is the only centralized data source that reflects the real positions of large institutions through the CME futures market. Euro FX (6E) futures are representative of EURUSD because large funds, banks, and CTAs use this instrument for large-scale transactions. Thus, the Net Position of Managed Money actually shows the imbalance in supply and demand among large players. If Net Long is historically high, it means that a significant portion of institutions have already bought euros; room for new buyers is limited. If Net Short is extreme, the market is oversaturated with sellers, creating potential for a short squeeze. In this sense, COT acts as a macro-level "order book": it does not show specific price levels, but it shows the aggregated imbalance of positions in the system. For a trader, this means understanding where the structural imbalance lies, where risk is accumulated, and in which direction the market becomes vulnerable.

Professional approach

1. Analysis of macro background (rates, inflation, yield differential).

2. COT check — whether it confirms the direction of movement.

3. Assessment of extremes in a 3–5 year context.

4. Technical timing of entry.

COT shows the balance of power in the system. It does not provide an exact entry signal, but it answers key questions: who holds the risk, is the market overcrowded with positions, is the trend supported by funds, and is the probability of a reversal increasing.