Forecasting supply and demand: The commitment of traders’ report and its use in trading & investing.
The U.S Commodity Futures Trading Commission (CFTC) publishes statistics of the futures market on a weekly basis called the commitment of traders — COT. The report has many valuable information inside, namely the number of futures contracts held by market participants (hedge funds, banks, producers of commodities, speculators, etc.).
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Two main categories have to be distinguished before going further:
- Big speculators: They deal in the futures market for speculative reasons, i.e. to profit from their positions. Examples of speculators are hedge funds.
- Big hedgers: They deal in the futures markets for hedging purposes, i.e. to cover their operations or other trading positions. Examples of hedgers are investment banks and big…
