Commitments of Traders to Include New Trader Categories
By Kristina Zurla Landgraf ISSUE 809 | September 2009
Many traders like to track the weekly Commitments of Traders (COT) report for shifts in the positioning of various futures market participants. Starting on September 4, 2009, changes were made to make the report more transparent, including new categories of traders for the major agriculture, energy and metals markets.
The Commodity Futures Trading Commission (CFTC), which publishes the data, now includes four new categories of traders: producer/merchant/processor/user; swap dealers, managed money (which incorporates CTAs and hedge funds), and “other” reportables.
The COT reports provide aggregate data on contract positions, but don’t reveal individual traders’ positions. The CFTC has recently increased the number of traders it collects information from and has given them more detailed guidelines of what specific data will be reported to the public.
The weekly CFTC report provides a breakdown of the open interest in a futures contract in which 20 or more traders hold positions that equal or exceed the reporting levels set by the CFTC. Previously, the CFTC classified large market participants into commercial and noncommercial categories, while smaller traders are included in the “nonreportable” category. These changes expand the categories to include more detailed information. On a quarterly basis, the CFTC will also release data collected from an ongoing special call on swap dealers and index traders in the futures markets.
“A core mission of the CFTC is to promote market transparency,” CFTC Chairman Gary Gensler said. “Last September, the CFTC recommended disaggregating our weekly Commitments of Traders reports. In July, I announced that we would also periodically release data on index investors’ participation in the commodity futures markets. I am pleased that…we will be able to take these steps toward increased transparency. For the first time, we will break out managed money and swaps in our COT reports and release information on index investment to give the public a better of view of trading activity in the futures markets,” he said.
In the July 31 COT report, the CFTC for the first time began including positions of ICE Futures Europe exchange traders of West Texas intermediate crude oil contracts.
The CFTC said it will continue to also release the traditional COT reports for a transition period until at least the end of 2009. This will allow the public to become familiar with the new reports as well as comment to the CFTC as to any further possible enhancements The CFTC also plans to soon release three years of historical data for the new report.
The CFTC is also working to create a new COT for all of the financial markets in a form that will improve the transparency of those markets. The categories of this new financial COT may be different from those being applied to the physical markets, described above. In addition to disaggregating the CFTC’s COT reports, the agency will begin periodically releasing data on index investment in the commodity futures markets.
You can view a webinar presented by Floyd Upperman with more information on how to interpret the COT reports and use the information to help you make trading decisions, here. Lind-Waldock also offers Upperman’s book, “Commitments of Traders; Strategies for Tracking the Market and Trading Profitably,” in our Traders Catalog.
Kristina Zurla Landgraf is editor of Lind eWire. She can be reached at editor@lind-waldock.com.
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