COT report explained: how to read forex positioning by trader group
The CFTC Commitments of Traders report shows how commercials, large speculators and small speculators are positioned in currency futures. How to read it, what percentiles mean and where its limits are.
What the COT report is
Every week the US Commodity Futures Trading Commission publishes the positions held in futures markets, including the major currency futures. Positions are reported as of Tuesday and released on Friday.
Three groups, three different stories
Commercials hedge real business exposure and often trade against the trend. Large speculators (funds) tend to follow trends. Small speculators are the residual group. Reading them separately tells you more than the net number alone.
Extreme positioning — for example a 3-year percentile above 90 or below 10 — shows a crowded trade. It is context, not a timing signal.
How Drift Engine shows it
Drift Engine shows COT by trader group for all eight currencies with weekly change and the percentile in a three-year window, next to the other fundamental views.
FAQ
How old is COT data when it is released?
It reflects positions as of Tuesday and is published on Friday — so it is three days old at release.
Does extreme positioning predict reversals?
Not reliably on its own. It shows where a trade is crowded; whether and when it unwinds depends on other factors.