Important Facts About Commitment Of Traders Report
by Ronald Ellis
Commodity traders have an open access to a distinctive market report each week, which details the position of major corporate speculators and small investors in various future markets. This information is popularly known as <a href="http://stock-compass.com">Commitment of traders</a> report. The report is an important analytical tool for traders since it offers up-to-date information concerning the trends in every commodity markets. It is also available on future contracts like interest rates, stock indexes, and currencies.
Many investors use the report to make wise investment decisions. For instance, they may use it to choose between long and short position. Most times, the investment trends of small speculators are ignored since they do not publish reports. The investment trends of commercial merchants are keenly followed due to their understanding of the market. Their positions are considered more profitable than those of small speculators are. Therefore, speculators who can decipher the report and make calculated guesses profit a lot from the commodity trading.
The COT report details the net long as well as short positions for each existing futures contract for three diverse types of traders. If commodity speculators are tremendously long or increasing their long positions, then a strong bias is expected on that market. A bearish bias on a market is expected when they are either short or amassing their short positions.
Mastery of the COT report becomes easy when you know the types of major players in the market and their corresponding positions. The data usually is presented in three special categories: non-commercial traders, commercial speculators, and non-reporting investors. Commercial speculators consist of institutions and accomplished investors who utilize the futures market to level off their risks specifically in the cash or spot market. A producer may decide to short his or her products to avoid instances of losses in case the price goes down in future.
Non-commercial trader comprises of major institution investors, hedge funds, as well as entities that are trading for both investment and growth. This group of speculators does not participate actively in creating, distributing, and managing underlying commodities and assets. Non-commercial investors have ability to navigate through the market shifts. Therefore, analyzing their investment strategies and their performance can give a hint concerning a specific asset class.
Non-reporting speculators comprise of small-scale investors who do not have to report their positions. It is assumed that this category is made up of individual speculators. The group of investors tends to bet against the trend rather than with it. Therefore, most accomplished investors pay little to no attention to this group.
There are different categories of COT reports ranging from equity investors (stock prospects), currency traders, and commodity traders comprised of oil and gold. Relying on raw data from CFTC might be confusing. Therefore, it is imperative to view the changes within the information for a significant period instead of a single snapshot.
Open interests can serve as an analytical tool especially when it comes to understanding the price behavior of a given market. The changes can help investors to expand their businesses and come up with long-term investment strategies. For instance, when the long-lasting market uptrend or downtrend begins to subside or level off, it may be an indication of an ending trend.
When you need the facts about the <a href="http://stock-compass.com">commitment of traders</a>, visit our web pages online today. More details are available at http://stock-compass.com now.
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New Unique Article!
Title: Important Facts About Commitment Of Traders Report
Author: Ronald Ellis
Email: nathanwebster335@live.com
Keywords: Commitment of Traders
Word Count: 541
Category: Finance
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