What Is the COT Report and How Do You Read the COT Index?
The Commitment of Traders (COT) report is a weekly release from the CFTC showing how many futures and options contracts different trader categories — commercial hedgers, asset managers, leveraged funds — hold long and short in a given market. The COT Index converts a trader category's net position into a 0–100 percentile rank against its own historical range, so you can tell whether current positioning is unusually stretched or unremarkable for that specific market.
Every Tuesday, large futures traders above a reporting threshold are required to disclose their positions to the CFTC. The agency compiles and releases that data every Friday — roughly a three-day lag. The report breaks total open interest down by trader category and shows how many contracts each category holds long and how many short.
Two classification schemes matter, depending on the market:
- TFF (Traders in Financial Futures) — used for currencies, indices, bonds and crypto. Categories: Asset Managers, Leveraged Funds, Dealers, Other Reportables.
- Disaggregated — used for physical commodities. Categories: Producer/Merchant/Processor/User (commercial hedgers), Swap Dealers, Managed Money, Other Reportables.
None of this is a forecast. It's a snapshot of who holds what, three days old by the time you read it.
Raw net position numbers don't mean much on their own. 150,000 contracts net long might be a historic extreme in one market and completely unremarkable in another — it depends on that market's normal range. The COT Index solves this by re-scaling the net position against its own history:
COT Index = (current net − lowest net in lookback window) ÷ (highest net − lowest net in lookback window) × 100
COTflow uses a 52-week rolling window. A reading above 85 means the current position is near the top of its own one-year range — the category is about as net long (or as net short, for hedgers) as it has been in the past year. Below 15 means it's near the bottom. Between 15 and 85 is a normal, unremarkable range.
The index is always relative to that specific market and category — comparing a COT Index of 90 on Gold to a COT Index of 90 on the Euro tells you both are stretched relative to their own history, not that the two positions are comparable in size or meaning.
Net positioning tells you which way a category leans. Open interest tells you how much conviction is actually behind that lean — and it's easy to miss.
A net long position can grow two very different ways: new money entering the market, or existing short positions being closed out. Both produce the same change in net position. They mean opposite things.
Open interest is what separates them. Rising open interest alongside a growing net means fresh positions are being built — real conviction entering the market. Falling open interest during the same net move usually means the move is mostly unwinding, not accumulating — shorts covering, not new longs committing.
Ignore open interest and an extreme can look stronger than it is: a net long propped up by short-covering, rather than new conviction, tends to unwind the moment the covering stops. Direction says where positioning leans. Open interest says how real it is.
Positioning data provides context — where institutions are leaning and how stretched that lean is. Price provides timing. Neither replaces the other.