What is cot in forex?

The Commitment of Traders (COT) report serves as a crucial tool for understanding the dynamics of the U.S. futures market. Published weekly by the Commodity Futures Trading Commission (CFTC), this report offers a comprehensive view of the aggregate holdings of various market participants.

Furthermore, the COT report allows traders to monitor the actions of key market participants, such as commercial traders, non-commercial traders, and other reportables. This information can be invaluable in formulating trading strategies and making informed decisions.

The COT report meticulously compiles data on the open interest, which encompasses the total number of contracts that have not yet been offset by an equal and opposite contract or fulfilled by delivery. This information is crucial for analyzing market sentiment and identifying potential trends.

Within the COT report, details are provided on the number of long, short, and spread positions held by market participants. Long positions represent a bet that the market will rise, while short positions indicate a prediction of a market decline. Spread positions, on the other hand, involve taking simultaneous long and short positions in related contracts to capitalize on price discrepancies.

By examining the distribution of these positions, traders can gain insights into the prevailing sentiment within the market. For instance, a high concentration of long positions may suggest a bullish sentiment, while a preponderance of short positions could indicate a bearish outlook.