Module 6D: Market Sentiment · Lesson 1 of 2 · Back to course
Technical analysis looks at price. Fundamental analysis looks at the economy. Sentiment analysis asks a different question: how are other traders already positioned? If almost everyone is already betting on the pound to rise, who is left to buy? The best-known free source of positioning data is the US Commitments of Traders (COT) report. This lesson explains what it is, when it comes out in UK time, how traders read it, and why it’s a background tool rather than a trading signal.
What the COT report is
The COT report is published every week by the US Commodity Futures Trading Commission (CFTC), the regulator of US futures markets. It shows how the open interest – the total number of open contracts – in each US futures market is split between different types of trader.
It covers futures on US exchanges, including:
- Currency futures – for example British pound, euro, Japanese yen and Swiss franc futures
- Stock index futures – for example S&P 500 and Nasdaq
- Commodities – gold, silver, crude oil and many more
- Interest-rate futures – including US Treasury futures
It doesn’t cover spot forex, spread bets or CFDs directly. But because the big currency and commodity futures markets are closely linked to the prices you see on a spread betting or CFD platform, the report is still widely used as a guide to how large traders are positioned.
When it comes out (in UK time)
- Data as of: Tuesday each week.
- Released: usually Friday at 3:30pm Eastern time, which is normally 20:30 UK time.
- In the short gaps when UK and US clocks have changed on different dates (late October/early November and part of March), it’s 19:30 UK time. In 2026, that applies to the release on Friday 30 October.
- US public holidays can delay the release by a day or two; the CFTC publishes the schedule in advance.
So by the time you read it on Friday evening, the data is three days old – and markets may have moved a long way since Tuesday.
Schedule and timing checked on cftc.gov on 17 October 2026.
Who’s in it
The report comes in several versions. The two most used by currency and index traders are:
The “Legacy” report splits large (“reportable”) traders into:
- Commercials – businesses that use futures to hedge real-world exposure, such as a company protecting itself against currency swings.
- Non-commercials – often described as large speculators, such as hedge funds and other funds trading for profit.
Everything else is non-reportable – smaller traders below the reporting thresholds.
The “Traders in Financial Futures” report (for currencies, indices and interest rates) uses more detailed groups: dealers/intermediaries (mostly banks), asset managers/institutions (such as pension funds), leveraged funds (such as hedge funds) and other reportable traders.
How traders read it
The basic idea is to look at net positioning: the number of long contracts minus short contracts for a group, and how it’s changing.
- Direction: are speculators (non-commercials or leveraged funds) net long or net short the pound?
- Change: is that net position growing or shrinking week by week?
- Extremes: is it near the largest net long or net short seen in recent years?
Two common readings:
- Trend confirmation. If speculators are steadily adding to net longs while price rises, positioning agrees with the trend.
- Crowding. If speculators are at a multi-year extreme net long, some traders argue the trade is crowded – there may be few buyers left, and any bad news could trigger a rush for the exit. This is a contrarian reading.
Both are interpretations. Extreme positioning can stay extreme for months while price keeps moving the same way.
Limits you need to know
- It’s out of date. Tuesday’s data, released Friday evening.
- It’s weekly. Useless for timing a day trade or scalp.
- It only covers US futures. The far larger spot forex market isn’t included.
- Categories are blurry. A “commercial” may also speculate; a “non-commercial” may be hedging. The labels are based on how traders are classified, not what they’re thinking.
- It has no built-in signal. There’s no level at which the report says “buy” or “sell”. Any threshold you pick is your own choice and needs testing.
Common mistakes
- Using it to time entries. It’s background context on a weekly or longer view, at best.
- Treating “extreme” as a reversal signal. Crowded positions can get more crowded.
- Mixing up the currency direction. Pound futures are quoted in US dollars per pound, so speculators net long pound futures is broadly like being long GBP/USD. Yen and Swiss franc futures work the same way, which is the opposite of how USD/JPY and USD/CHF are quoted.
- Reading one week in isolation. The trend in positioning over several weeks is more informative than any single report.
Example (illustrative numbers)
All figures are made up for teaching purposes. They aren’t real COT data or a trade idea.
A swing trader checks the British pound futures section of the COT report for leveraged funds over five weeks:
| Week (Tuesday data) | Long contracts | Short contracts | Net position |
|---|---|---|---|
| 1 | 40,000 | 30,000 | +10,000 |
| 2 | 45,000 | 28,000 | +17,000 |
| 3 | 52,000 | 25,000 | +27,000 |
| 4 | 58,000 | 22,000 | +36,000 |
| 5 | 63,000 | 20,000 | +43,000 |
Funds have been adding to net longs every week, and +43,000 is near the top of the range the trader has recorded over the last few years. Meanwhile GBP/USD has risen steadily.
How might a careful trader use this? Not as a sell signal. Instead, their plan might say: “When speculative positioning is near an extreme, I don’t add new positions in the crowded direction and I use normal size only.” It’s a risk filter. The positioning tells them a lot of people already hold the same view – not what price will do next.
The prop firm angle
The COT report has almost no direct use for intraday challenge trading, and it’s easy to over-research. If you’re in a challenge, it’s at most a weekly background check for swing trades. Don’t let a “crowded” reading persuade you to take a counter-trend trade outside your plan, or to hold a losing trade because “positioning will turn”.
Key takeaways
- The COT report shows how large traders are positioned in US futures markets, including currency, index and gold futures.
- It uses Tuesday’s data and is usually released on Friday at 20:30 UK time (19:30 in the clock-change gaps).
- Traders watch net positioning, its changes and extremes – for trend context or as a contrarian warning.
- It’s slow, weekly and only covers US futures: a background tool, not a timing signal.
Quick quiz
- Who publishes the COT report? (The US Commodity Futures Trading Commission, the CFTC.)
- What day’s data does the report usually show, and when is it usually released in UK time? (Tuesday’s data, released Friday at 20:30 UK time – 19:30 in the clock-change gaps.)
- What does “net long 30,000 contracts” mean? (The group holds 30,000 more long contracts than short contracts.)
- What is the contrarian reading of an extreme net long? (The trade may be crowded, with few buyers left, so it could be vulnerable to a sharp reversal.)
- Speculators are heavily net long yen futures. Is that like being long or short USD/JPY? (Short USD/JPY, because yen futures are quoted the other way round.)
Key terms
Sentiment · COT report · Open interest · Net positioning · Futures · Hedging · Contrarian · Crowded trade · Also see Trading jargon in plain English.
Try this
Go to the CFTC website and find the latest Traders in Financial Futures report for British pound futures (or use a free site that charts COT data). Write down the leveraged funds’ long and short contracts and work out the net position. Do this for four weeks in a row and plot it next to a weekly GBP/USD chart. Notice how positioning and price relate – and how often they don’t. No trades needed.
FAQ
Is the COT report useful for day trading? Not really. It’s weekly and three days old when published. It’s mainly used by swing and position traders as background.
Where do I find it? On cftc.gov under “Commitments of Traders”. Several free websites also turn the data into charts.
Does the COT report cover crypto? It covers some crypto futures traded on US exchanges. Remember that crypto derivatives can’t be sold to retail clients in the UK.
Disclaimer: This page is general education, not financial or investment advice or a personal recommendation, and it doesn’t take your circumstances into account. Examples are hypothetical, for illustration only, and not an invitation to buy or sell. Learning a strategy doesn’t guarantee profits. Past performance is not a reliable guide to future results. Futures, spread bets and CFDs are complex and carry a high risk of losing money quickly because of leverage, and most retail traders lose money. With a real futures account, losses can exceed your deposit. Only trade with money you can afford to lose, and speak to an independent FCA-authorised adviser if you’re unsure. Read our full risk warning.