What Are the 3 Types of COT Reports, and Which One Should You Use?
The Commitment of Traders (COT) report is a powerful sentiment tool used by serious futures and options traders. Understanding the different Types of COT Reports is crucial for effective market analysis. Published weekly by the U.S. Commodity Futures Trading Commission (CFTC), these reports reveal the net positioning of major market participants.
However, the CFTC issues three distinct formats: Futures-Only (Legacy), Disaggregated, and Traders in Financial Futures (TFF). Knowing their differences—especially which one to use for your specific market—is vital.
1. The Futures-Only Report (The Legacy Standard)
The Futures-Only report is the original and longest-running format of the COT data. It serves as the baseline for historical analysis, often providing data going back decades. For comprehensive details on the data collection process, you can visit the official CFTC website.
Trader Categories in the Legacy COT Report
This report divides participants into three broad groups, focusing purely on their Futures contracts positions:
- Commercials: These are large market participants (producers, processors, merchants) who use the market strictly for hedging—protecting against price fluctuations.
- Non-Commercials: These are large speculators, typically hedge funds and large managed money entities. Their activity usually reflects the dominant trend of the market.
- Non-Reportable Positions: This is the collective positioning of small speculators or individual traders whose holdings do not meet the minimum reporting threshold set by the CFTC.
Covered Markets
The Futures-Only report covers positions in all US-listed futures markets, including energies, metals, soft commodities, currencies, and financials.
When to Use: The Legacy report is best used for long-term historical comparisons and for commodities that have deep, well-established futures markets.
2. The Disaggregated Futures & Options Combined Report
The Disaggregated report was introduced to provide a clearer, more precise classification of traders, specifically in the Commodity sector. Crucially, it combines positions from both Futures and Options contracts to give a total exposure figure. This is one of the most useful types of COT reports for commodity analysis.
Trader Categories
The Disaggregated format segments traders into four highly useful categories:
- Producer/Merchant/Processor/User: The hedgers who manage physical risk.
- Swap Dealers: Financial institutions that act as intermediaries, often hedging client exposure through the futures market.
- Money Managers: Pure speculators (CTAs, Hedge Funds, etc.). This category is vital for tracking aggressive speculative flow.
- Other Reportables: A basket category for large traders who don’t fit into the other defined roles.
Covered Markets
This report is utilized exclusively for Commodity markets (e.g., Crude Oil, Corn, Gold, Cattle). Its primary purpose is to distinguish between entities involved in the physical commodity business and those focused solely on speculation.
When to Use: Use the Disaggregated report when analyzing any commodity market for a clearer, modern view of speculative versus hedging activity.
3. The Traders in Financial Futures (TFF) Report
The Traders in Financial Futures (TFF) report was created to address the complexity of Financial Markets—where the players and their motivations differ significantly from physical commodities. Like the Disaggregated report, it also combines Futures and Options positions.
Trader Categories
The TFF format uses a structure optimized for financial institutions:
- Dealer/Intermediary: Financial market makers and banks (similar role to Swap Dealers in the Disaggregated report).
- Asset Manager/Institutional: Large, long-term investors such as pension funds, insurance companies, and mutual funds.
- Leveraged Funds: This is the most important speculative group in TFF, including hedge funds and other entities using high leverage. Their positioning signals key speculative extremes.
- Other Reportables: Large traders not classified elsewhere.
Covered Markets
The TFF report focuses strictly on Financial Instruments:
- Currencies (Forex Futures)
- Stock Indices (e.g., S&P 500, Nasdaq)
- U.S. Treasury products and other Interest Rate Instruments.
When to Use: Use the TFF report exclusively when analyzing markets like the Euro Futures, Japanese Yen Futures, or major Stock Index Futures.
Which COT Report Should You Use?
Choosing the right report depends entirely on the asset you are analyzing:
| Asset Class | Recommended COT Report | Key Trader Category to Watch |
|---|---|---|
| Crude Oil, Gold, Corn, etc. (Commodities) | Disaggregated | Money Managers (Speculation) |
| Euro, Yen, British Pound (Currencies) | TFF | Leveraged Funds (Speculation) |
| S&P 500, Nasdaq (Financials) | TFF | Leveraged Funds (Speculation) |
| Long-Term Historical Analysis (>15 years) | Futures-Only (Legacy) | Commercials (Contrarian Extreme) |
By focusing your analysis on the correct report format—TFF for financials and Disaggregated for commodities—you gain the sharpest, most relevant insight into how the market’s major participants are positioned. This precision is key to improving your trading decisions. Learning the different types of COT reports is the first step toward advanced market analysis.
