The Commitments of Traders (COT Report) has several key terms you need to understand before you can read the report. The key terms are, Open Interest, Reportable Positions, Commercial and Non-commercial Traders, Non-reportable Positions, Spreading, Changes in Commitments from Previous Reports, Percent of Open Interest, Number of Traders, Old and Other Futures, Concentration Ratios, and Supplemental Report.
Reportable Positions are clearing members who file daily reports with the Commission, such as, futures commission merchants, and foreign brokers (collectively called “reporting firms”).
Those reports show the futures and option positions of traders holding positions above specific reporting levels set by CFTC regulations, which are stated on the Commission’s website.
If, at the daily market close, a reporting firm has a trader with a position at or above the Commission’s reporting level in any single futures month or option expiration, then regardless of size, the firm reports the trader’s entire position in all futures and options expiration months in the commodity.
The aggregate of all traders’ positions reported to the Commission usually represents 70 to 90 percent of the total open interest in any given market.
From time to time, the Commission will raise or lower the reporting levels in specific markets to balance between collecting sufficient information or oversee the markets and minimizing the reporting burden on the futures industry.