Commitment of Traders Report

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The Commitment of Traders Report is originally referred to as Commitments of Traders (CoT). This is a regularly published report by the Commodity Futures Trading Commission (CFTC), which serves as the regulatory body for the American commodity exchanges. The CoT contains information about the trading positions of the notifiable market participants in the form of a list of the open interest .

Goal setting

The goals of the CoT are to document and monitor the trading activities of large market participants. The data from the respective Tuesday, which is transmitted after the close of trading, is used in the report. The publication will take place on the following Friday. The CoT is created for all markets in which at least 20 traders are active and whose positions are above the notification requirement. Two variants of the report are published. A version limited to futures contracts and a version expanded to include options .

The informative value of the report is based on the fact that the sum of the open interest of all market participants is zero. So there is also a short position for every long position. The distribution of the positions between the market participants is now of interest. A widespread strategy is based on the assumption that the commercials have the most extensive market information due to their original business or that they themselves represent the actual market, which is why they i. d. Usually should be better positioned. According to this strategy, large differences in the positions of the market participants indicate a market movement in the direction anticipated by the commercials.

differentiation

Within the report, the market participants are divided into the following groups:

Commercials

Large traders who primarily appear on the commodity futures markets to enter into hedging positions are subsumed under the commercials. These traders have corresponding opposing positions and correspond to the classic definition of hedgers .

Non commercials

Non-commercials are market participants whose involvement has a speculative background. You are particularly interested in making a profit by participating in price movements in the market.

Non reportable

The group of non-reportables represents a summary of the other market participants. These are mainly small traders who are active on the commodity futures markets on behalf of customers. Since these do not require a report, the position is determined within the CoT as the difference between the commercial and non-commercial positions in relation to the total open interest.

Extended CoT report

Since September 4, 2009, an extended CoT report has been published parallel to the classic variant for so far 22 raw material markets. The market participants are also broken down here. With the aim of providing additional transparency of the market, the reportable market participants are now divided into the following four groups:

  • 1. Producer / Merchant / Processor / User
  • 2. Swap Dealer
  • 3. Money Manager
  • 4. Other reportables

The first two correspond to the commercials of the traditional report. The Producer / Merchant / Processor / User group uses the futures markets to hedge risks that arise from the operational business in connection with the physical raw material. Swap dealers also act as hedgers. On the other hand, you are interested in hedging risks from swap transactions. The counterparties can be both speculative and commercial traders.

Market participants who pursue speculative interests on behalf of customers are classified as money managers. Like the Other Reportables, which represent a summary of all other market participants who are required to report, these can be assigned to the non-commercials in traditional CoT.

Another new feature of the extended CoT is the disclosure of spread positions for market participants 2 to 4. Opposing positions in a market are no longer offset, but shown separately.

swell

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