COT question

Discussion in 'Trading' started by a529612, Aug 2, 2006.

  1. Am I understanding this correctly? Who are the commercials, BTW?

    Large specs = hedge fund = smart money
    Small specs = retail losers = dumb money
    Commercials = ??

    If the large specs are increasingly long (or short), does it mean you should play on the same side?
  2. panlee


    Commercials are not speculators. They are the producers (eg farmer) or consumers (eg food company) of the future product, who need to hedge in the future market for protection.
  3. But how about commercials for stock index futures? Are they the same people, i.e. farmer?
  4. MTE


    Those would be fund managers hedging their underlying stock portfolios.

    Not necessarily. I mean it is not as clear cut as that. Commercials are big players as well so you cannot just disregard them.
  5. How are they different from large specs (hedgies)? Are they the long only mutual fund jockies?
  6. MTE


    Basically, yes. The difference is that specs take speculative positions in expectation of making a profit. Commercials hedge their underlying instrument position so that they are not losing money, they are not interested in making a profit.
  7. Is there a chart indicator that follows commercials for index futures? I just watched Larry Williams tape today, called "the money tree." And he talks about commercials. The tape is outdated from the 90's. But I wanted to try to use 'commercials' with index futures and see if it worked. I can't find commercials in any chart packages though. Any suggestions? For trading the emini S&P 500.
  8. MTE


    There's no chart indicator for this. COT is released once a week so if you want to plot it on a chart then I'd say you have to do it manually.
  9. Hayek