The Commitment of Traders Report How to Read Big Bank Positions and Apply Them to Your Trading Today

If you've been trading for a while, you've probably heard the idea that "the big players control the market." It’s one of those truths that sits quietly behind every price movement on your chart. Whether you’re trading XAUUSD, EURUSD, or commodities like oil, institutional capital moves the needle, and the retail crowd often follows. The question is, how do you see what these big institutions are doing? How can you tell if hedge funds are buying gold or if dealers are hedging a move in the euro?

The answer is the Commitment of Traders (COT) report a piece of publicly available data that almost feels like a cheat code when you learn how to read it right. In this article, I’m going to walk you through exactly what the COT report is, how it’s collected, what kind of information it shows, and most importantly how to use it in real trading, starting today.

Whether your brand new to futures data or already dabbling in macro sentiment, this will give you both the depth and the clarity you need to start using the COT report like a tool, not just a curiosity.

COT Table

What Is the COT Report, Really?

At its core, the Commitment of Traders report is a breakdown of open interest positions held by different types of traders in futures markets. It’s published every week by the Commodity Futures Trading Commission (CFTC) the regulatory body for U.S. futures and options markets. The goal of the report is to bring transparency to the market by showing where major categories of traders are positioned long, short, or flat.

The data comes directly from reporting firms and clearing members who are required to submit detailed position breakdowns to the CFTC. These reports are typically based on positions as of Tuesday's close, and the report is published on Friday at 3:30 p.m. Eastern Time.

So yes, there’s a built-in delay. That’s one of the trade-offs, and we’ll talk more about that soon. But even with that delay, the data is incredibly useful because it tells you what the biggest money in the market was doing just a few days ago and big money tends to move slowly. That means the footprints are still fresh when the report comes out.

How the Report Is Structured — and Who You’re Actually Looking At

One of the reasons traders get overwhelmed by the COT report is because of the terminology. It can feel like reading legal code at first. But once you break it down into who the players are, the picture becomes a lot clearer.

The report divides traders into a few key categories:

1. Dealer/Intermediaries – These are the banks, brokers, and liquidity providers. They’re not taking positions to speculate; they’re typically hedging exposures created by client activity. Think of them as the "market makers." Their positions are often contrarian to price trends because they’re absorbing institutional flow.
2. Asset Managers/Institutional Investors – This includes pension funds, mutual funds, and large asset allocators. They are usually trend-followers and longer-term holders. When they build up positions, it often supports the existing direction of the market.
3. Leveraged Funds – These are the speculative hedge funds, CTAs, and proprietary trading firms. They are active, aggressive, and often short-term in their positioning. Because of their size and speed, they can give you great clues into the speculative appetite in the market.
4. Other Reportable – These are professional traders or corporations that don’t fit neatly into the categories above. Not as relevant for most retail-focused analysis.

So, when you pull up a COT report especially in the "Disaggregated" format you’re seeing what real money and fast money are doing. That’s valuable context, especially when you want to figure out if a move is supported by institutional conviction or just noise.

How to Read the Report Without Losing Your Mind

When you first look at the COT data, the table format can feel intimidating. Lots of numbers. Longs here, shorts there, changes week over week. But all you really need to do is this:

Look at the net positioning for a particular group. That means subtracting the number of short contracts from the number of long contracts. Are asset managers long 200,000 contracts on gold futures and short 50,000? Then they’re net long 150,000. That gives you an idea of their bias.

The second step is to track changes over time. The real signal in the COT report isn’t the static number it’s the shift. Did hedge funds just cut their euro longs by half? Did gold specs add 30,000 contracts in one week? These changes often lead price, or at the very least confirm the strength of a trend.

Some traders like to chart this data using tools like Tradingster, Barchart, which all convert the raw numbers into historical charts. This can make it easier to see reversals or extreme positioning that might suggest a turning point.

COT Line Chart With all the Participants 

Practical Example: COT and Gold (XAUUSD)

Let’s bring this into the real world. Suppose you’re trading gold, and price is hovering near a multi-month resistance. Your chart says maybe this is a top. But you check the COT data, and you see that leveraged funds have just added aggressively to their long positions for three weeks in a row. Meanwhile, asset managers are holding near-record longs.

Now you have a different story. Instead of fading the high, you might wait because the big players are still pushing in that direction. Or at the very least, you’ll reduce your position size or wait for confirmation before going against that weight of money.

On the other hand, if you see that leveraged funds have suddenly flipped from net long to net short, that’s a warning sign that momentum might be turning. Combine that with a weak technical structure, and now you’ve got a high-probability setup in the opposite direction.

Last 1 Month of COT from Gold 

XAUUSD Last 1 Month (Bllusih as seen on COT above) 

The Pros and Cons of Using the COT Report

Let’s be honest the COT report is not perfect. Like any tool, it has limitations. But it also has strengths that, when understood properly, make it one of the most underrated data points in trading.

The Good:

• It’s real data not speculative, not sentiment-based, but actual positions held by actual institutions.
• It gives you a glimpse into the flow that drives long-term moves.
• It can act as a leading indicator when positioning shifts dramatically before price moves.

The Bad:

• It’s delayed what you’re seeing on Friday reflects data from Tuesday. In fast-moving markets, this can be a drawback for short-term trades.
• It doesn’t tell you why a position changed. That’s where your own analysis and narrative-building come in.
• It takes time to interpret. This isn’t plug-and-play; it’s an insight tool for the patient.

How You Can Start Using COT Today (Even If You’re New into Trading)

If you’re just starting out, don’t worry about mastering the full report overnight. Instead, start simple:

Pick one instrument like gold, oil, or EURUSD and check the COT data once a week. Focus on leveraged funds and asset managers. Are they building or reducing exposure? Are they net long or net short? Then look at what price has done over that time.

If positioning and price are moving in the same direction, that’s confirmation. If they diverge, something’s up and that’s where your opportunity may lie.

Make it part of your routine. Every Friday (or over the weekend), spend 15 minutes reading the update. Over time, you’ll start seeing the patterns and when you see a price move that aligns with a fresh shift in institutional positioning, you’ll feel a whole lot more confident pulling the trigger.

The Commitment of Traders report is not a crystal ball. It won’t tell you where price is going tomorrow. But it will show you where the serious money is betting, and that’s a powerful edge if you know how to use it. Trading is a game of probabilities, and when you’re lined up on the same side as the funds and institutions who move the market, your odds improve dramatically.

So, if you’ve been relying purely on price action, or if you’ve always wondered how to “trade like the big guys,” the COT report is your starting point. Learn the language. Follow the flow. And remember the clues are always there. You just need to know how to read them.

This content may have been written by a third party. ACY makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplies by any third-party. This content is information only, and does not constitute financial, investment or other advice on which you can rely.