GlossaryCOT positioning

COT positioning

COT positioning shows how large groups of traders are positioned on the US futures exchanges: who is net long, who is net short, and how extreme that is compared with the last three years. The entry draws nothing on the chart; it opens the COT report widget in a widget column, and “✓ Active” in the menu closes it again.

How to read it

Speculators (leveraged funds, managed money, non-commercials) usually follow the trend. A net position near the 3-year high means the bet is full, new buyers are getting scarce, and unwinding can push the price down quickly. Conversely, an extreme on the short side carries the risk of a short squeeze.
Hedgers (commercials, producers / merchants) often trade against the trend: they sell forward when prices are high. Their extremes are therefore often seen as a contrarian signal.
Futures are a zero-sum game: Every long has a short. The net positions of all groups in a report offset each other; if one group is extremely long, another is correspondingly short.
CME Bitcoin: Leveraged funds are often clearly net short here. Much of this is basis trading: buying Bitcoin or ETF shares and selling the future to collect the future's premium. That is not a bet on falling prices.
Pace: The report comes out weekly, three days after the reporting date. It describes the situation; it is not a signal for the next day.