What is the COT Report?
The Commitment of Traders (COT) Report is a weekly report from the US CFTC (Commodity Futures Trading Commission). It shows the aggregated positioning of different market participants on futures exchanges — who holds how many long and short positions.
The COT Report is published every Friday but is based on data from the Tuesday of the same week. This means the data is always at least 3 days old. Despite this, the COT Report is one of the most important sentiment indicators for institutional trading because it is the only public source for large investor positioning.
The Three Main Groups in the COT Report
1. Commercials (Hedgers)
Commercials are companies that use futures to hedge against price risks. A wheat farmer, for example, sells wheat futures to protect against falling prices. Commercials are typically on the "right" side of the market because they know the underlying market best.
Important: When Commercials reduce their short positions, it is often an early bullish signal. They expect higher prices and are reducing their hedging.
2. Non-Commercials (Speculators)
Non-Commercials are institutional traders, hedge funds, and managed money. They trade not to hedge but to profit. Their positioning shows where "Smart Money" is betting.
Caution: Even institutional speculators can be wrong at extremes. When Non-Commercials hold record-high long positions, it can be a warning signal for an upcoming correction — similar to retail traders, just at a higher level.
3. Non-Reportable (Retail)
Non-Reportable positions are all those below the CFTC reporting threshold. These are typically smaller traders and private investors. This group is historically the worst positioned.
How to Read the COT Report
Step 1: Calculate Net Positioning
For each group, calculate the net position: long positions minus short positions. Example: If Non-Commercials hold 150,000 long contracts and 80,000 short contracts, their net position is +70,000 (net long).
Step 2: Consider Historical Context
A net long position of 70,000 contracts means little on its own. You need to view it in historical context: Is it in the upper or lower range of the last 12-24 months? A helpful tool is the COT Index, which shows the current position as a percentage of the historical range.
Step 3: Look for Divergences
The most valuable signals arise when Commercials and Speculators are positioned in opposite directions:
Step 4: Identify Extremes
When a group's net position reaches a 12-month extreme, the probability of a trend reversal increases significantly. This applies to both Commercials and Speculators.
COT Report vs. Retail Sentiment
Differences
| Feature | COT Report | Retail Sentiment (Sentmo) |
|---------|-----------|--------------------------|
| Data Source | CFTC (Futures exchanges) | CFD Brokers (ESMA-regulated) |
| Participants | Institutional + Hedgers | Retail traders |
| Update Frequency | Weekly (Friday) | Every 15 minutes |
| Delay | 3+ days | Real-time |
| Strength | Institutional positioning | Contrarian signal through retail mistakes |
Why Use Both?
The COT Report shows what the professionals are doing. Retail sentiment shows what the crowd is doing. The strongest signals emerge when both point in the same direction:
High-probability example setup:
Limitations of the COT Report
Practical Application: COT + Sentmo Workflow
Weekly Check (Friday)
Daily Check
Conclusion
The COT Report is an indispensable tool for any trader who wants to go beyond pure chart analysis. Combined with Sentmo's retail sentiment, you get a complete picture of market positioning — from the largest institutions to the smallest retail trader. The strongest trading setups emerge when both datasets point in the same direction.