What is the COT Report?
The Commitments of Traders (COT) report is a weekly publication by the US Commodity Futures Trading Commission (CFTC). It shows the total long and short positions held by three categories of traders in the futures markets: Commercials, Non-Commercials (large speculators), and Non-Reportable (small traders).
In short — it’s a window into what institutional traders, hedge funds, and commercial hedgers are actually doing with their money. It’s released every Friday covering positions as of the previous Tuesday. This is publicly available data that most retail traders either ignore or don’t know exists.
Where to find it: The CFTC publishes COT data free at cftc.gov. Many traders use third-party charting tools that overlay COT data directly on price charts for easier reading.
The Three Trader Categories
🏭 Commercials (Hedgers)
Businesses that use futures to hedge real-world exposure — oil producers, grain farmers, banks. They trade against the trend to protect their business. When they’re extremely short, it often means the market is near a top. They are usually wrong on direction but right on extremes.
📈 Non-Commercials (Large Speculators)
Hedge funds and large managed money accounts. They trade for profit and tend to be trend-followers. When they’re extremely long, it can signal the trend is overextended. They are the smart money — but they can be too early or too late at extremes.
👤 Non-Reportable (Small Speculators)
Retail traders with smaller positions below the reporting threshold. Historically, small speculators are often on the wrong side at major turning points. When they reach extreme positioning, it’s often a contrarian signal.
How to Read COT Data for Trading
Raw COT numbers on their own don’t tell you much — you need to look at extremes relative to history. The most useful signal comes when Non-Commercial (large speculator) positioning reaches a multi-year extreme in one direction.
Bullish COT Signal
When large speculators are at or near their most extreme net short position in history for a given market — meaning they’ve been selling and are now heavily short — this is often a contrarian buy signal. The market has been sold hard, sentiment is pessimistic, and a reversal is increasingly likely as those shorts need to be covered.
Bearish COT Signal
When large speculators are at or near their most extreme net long position — meaning they’ve been buying aggressively and are very long — this signals a potentially overextended rally. Everyone who wanted to buy has already bought. Who’s left to push price higher?
Important: COT data is released with a delay and should never be used as a standalone entry signal. It’s a positioning context tool — use it alongside price structure and other confirmation. An extreme reading can stay extreme for weeks before reversing.
Net Positioning — The Key Number
The most commonly watched figure is net positioning: the total long contracts minus the total short contracts for each trader category. A rising net long position means that group is becoming more bullish. A falling net long (or rising net short) means they’re becoming more bearish.
Plotting net positioning as a line chart beneath price gives you a visual of how sentiment is shifting over time — and critically, whether it’s diverging from price. If price is making new highs but large speculator net longs are falling, that’s a warning of weakening conviction beneath the surface.
COT and the NQ / ES Futures
For futures traders focused on the Nasdaq (NQ) and S&P 500 (ES) — the markets Satdish specialises in — the COT report for E-mini S&P 500 and E-mini Nasdaq futures is particularly relevant. Tracking how institutional positioning in these contracts shifts at key market turning points gives you a longer-term context that pure price action alone can’t provide.
Combining COT with Price Analysis
The most powerful application of COT data is combining it with price structure:
- Extreme bearish positioning (large specs heavily short) + price at a major support level = high-probability long setup
- Extreme bullish positioning (large specs heavily long) + price at a major resistance level = high-probability short setup
- COT divergence from price (new price high, falling net longs) = potential trend exhaustion warning
COT data is one of the tools that separates traders who understand the bigger picture from those who only see the last few candles on their screen.