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📖 GLOSSARY · POSITIONING & SENTIMENT

COT Report (Commitments of Traders)

A weekly public report showing exactly how large institutional traders are positioned — a rare window into the big money.

The Commitments of Traders report is published weekly by the CFTC (the US derivatives regulator) and breaks down futures market positioning by trader category — commercial hedgers, large speculators (often hedge funds and similar institutions), and smaller non-reportable traders. For currencies, the large speculator category is the one most closely watched, since it's treated as a proxy for how hedge funds and similar institutional players are leaning.

Net positioning, and why crowded trades matter

Net positioning is simply long contracts minus short contracts for a given category — a positive number means more traders are betting the currency rises, a negative number means more are betting it falls. What matters most isn't the level itself but how crowded it's become relative to its own recent history: when a position reaches an extreme that's rarely been seen before, it usually means there are fewer new buyers (or sellers) left to push the move further, with a larger share of existing positions sitting one-sided and vulnerable to being unwound quickly if the news flow turns.

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