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.
Spreading – For the futures-only report, spreading measures the extent of which each non-commercial trader holds equal long and short futures positions.
For the options-and-futures-combined report, spreading measures the extent of which each non-commercial trader holds equal combined-long and combined-short positions.
For example, if a non-commercial trader in Eurodollar futures holds 2,000 long contracts and 1,500 short contracts, 500 contracts will appear in the “Long” category and 1,500 contracts will appear in the “Spreading” category.
These figures do not include inter-market spreading; for example, spreading Eurodollar futures against Treasury Note futures.
For the “old” and “other” figures, spreading is calculated for equal long and short positions within a crop year.
If a non-commercial trader holds a long position in an “old” crop-year future and an equal short position in an “other” crop-year future, the long position will be classified as “long-only” in the “old” crop year and the short position will be classified as “short-only” in the “other” crop year.