COT report explained:your COT Friday.
The COT report, short for Commitment of Traders, shows how large traders are positioned in futures markets. With the COT report explained properly, it tells you whether the big money is building a position, adding to it or starting to leave.
The data comes out every Friday after the CFTC publishes it, 20:30 London time, and it covers positions up to the Tuesday before. That makes it a weekly tool, not a trading signal.
What the COT report shows
For every market it splits positions into groups. The 2 that matter most for currencies are leveraged funds (hedge funds and similar) and asset managers. You see how many contracts they hold long and short, and how that changed since last week.
How to read it in 1 minute
Look at 2 things: the net position (long minus short) and the change this week. A net long that keeps growing week after week means institutions are building conviction. A net long that starts shrinking after a long run is often the first sign a trend is getting tired.
Your COT Friday routine
After the release, open COT Positioning in Prime Terminal for your 3 markets from Sunday. Does the positioning support your bias, or is it turning against it? Note it in your plan. That is all. It takes 5 minutes.
Use it in real trading
The tool informs the decision, it never makes it. Here is how it plays out on real trading days.
Your EURUSD bias is bullish and leveraged funds added 28K contracts, the 3rd increase in a row. The positioning supports the idea.
Gold is bullish, but funds have cut their net long 3 weeks in a row. You keep the idea but reduce your size until the picture is clear.
Positioning is at a multi-year extreme. That does not mean it reverses tomorrow, but it means the easy part of the move is probably done.
Mistakes to avoid
- Trading the COT data on Monday as if it were fresh. It is already 3 days old.
- Looking only at the net position and ignoring the weekly change.
- Using COT as an entry signal instead of as context for your bias.
What makes it different
The raw CFTC report is public and hard to read. In Prime Terminal the data is cleaned, charted per market and placed next to the bias and retail positioning, so you see who is on which side in 1 view.
Questions
When is the COT report released?
Every Friday at 15:30 New York time, 20:30 London, with data as of the previous Tuesday.
Which group should I follow?
For currencies, leveraged funds and asset managers. Commercial hedgers matter more in commodities.
Is COT useful for day trading?
Only as background. It describes weekly positioning, so it fits swing trading and weekly planning best.