Commitments of Traders Report
The Commodity Futures Trading Commission (CFTC) provides inside information about purchases and sales of futures contracts. The largest players in each market are required to disclose their positions to the CFTC on a daily basis and this report is released weekly on Friday afternoon (the reporting requirement varies by commodity). These traders are separated into Commercial Hedgers and Large Speculators.
The positions of Small Traders are calculated by subtracting the total
of contracts held by the reporting groups from all the contracts outstanding
(Small Traders are not required to report their positions). Commercial
Hedgers hold a significant informational edge over other traders as far
as fundamental supply-and-demand statistics are concerned. They tend to
be early, but they are usually right on the long run, quite contrary to
the small traders. Extreme divergences in long and short positions of
Small Traders, Large Speculators and Commercial Hedgers have proven to
be reliable indicators of important trend changes. In such cases it is
not advisable to bet against the Commercial Hedgers. All other patterns
are meaningless. The following charts show you the positions of these
three groups of market participants. A 10-week moving average is applied
to smooth out the swings.
Three different charts are available for each commodity:
- Short positions of all market participants (Large Speculators, Commercial Hedgers, Small Traders) on a percentage basis.
- Short positions of Small Traders only. Significant changes in those numbers give you an insight about prevailing sentiment..
- The Long/Short Ratio of Small Traders. This chart is computed by dividing
the long and short positions of Small Traders. High readings indicate
heavy buying by Small Traders which is bearish.
Past performance does not guarantee future results!
