On COT Report – Part VII. – What is net commitments of traders data?

The essence of COT analysis is to subtract the shorts from the longs and arrive to the net commitment of each trader category. An equal amount of longs and shorts balance themselves out, that gives no useful information about where those traders, in aggregate, view the markets to go in the future. If, however, they hold more long contracts than short contracts, it is clear that they are bullish. Of course, if they hold more shorts than longs, they are bearish.

Net Commercials position = Commercial long – Commercial short

Net Large Speculator position = Non-commercial long – Non-commercial short

Net Small Speculator position = Non-reportable long – Non-reportable short