Commitment of Traders Disaggregated

The Commodity Futures Trading Commission (Commission) began publishing a Disaggregated Commitments of Traders (Disaggregated COT) report on September 4, 2009. The Disaggregated COT report increases transparency from the legacy COT reports by separating traders into the following four categories of traders:

• Producer/Merchant/Processor/User - A "producer/merchant/processor/user" is an entity that predominantly engages in the production, processing, packing or handling of a physical commodity and uses the futures markets to manage or hedge risks associated with those activities.
• Swap Dealer - A "swap dealer" is an entity that deals primarily in swaps for a commodity and uses the futures markets to manage or hedge the risk associated with those swaps transactions. The swap dealer’s counterparties may be speculative traders, like hedge funds, or traditional commercial clients that are managing risk arising from their dealings in the physical commodity.
• Managed Money - A "money manager," or Managed Money for the purpose of this report, is a registered commodity trading advisor (CTA); a registered commodity pool operator (CPO); or an unregistered fund identified by CFTC. These traders are engaged in managing and conducting organized futures trading on behalf of clients.
• Other Reportables - Every other reportable trader that is not placed into one of the other three categories is placed into the "other reportables" category.

The Disaggregated COT sets out open interest by long, short, and spreading for the three categories of traders - "swap dealers," "managed money," and "other reportable." For the "producer/merchant/processor/user" category, open interest is reported only by long or short positions. "Spreading" is a computed amount equal to offsetting long and short positions held by a trader. The computed amount of spreading is calculated as the amount of offsetting futures in different calendar months or offsetting futures and options in the same or different calendar months. Any residual long or short position is reported in the long or short column. Inter-market spreads are not considered.

Numbers of Traders - The sum of the numbers of traders in each separate category typically exceeds the total number of reportable traders. This results from the fact that, in the "swap dealers," "managed money," and "other reportables" categories, "spreading" can be a partial activity, so the same trader can fall into either the outright "long" or "short" trader count, as well as into the "spreading" count. Additionally, a reportable "producer/merchant/processor/user" may be in both the long and the short position columns. In order to preserve the confidentiality of traders, for any given commodity where a specific category has fewer than four active traders, the size of the relevant positions will be provided but the trader count will be suppressed.

Comparison of the Disaggregated Commitments of Traders Report to the Legacy Commitments of Traders Report

The legacy COT reports divide reportable traders into the two broad categories of "commercial" and "non-commercial." The "commercial" trader category has always included producers, merchants, processors and users of the physical commodity who manage their business risks by hedging. It has also included swap dealers that may have incurred a risk in the over-the-counter (OTC) market and then offset that risk in the futures markets, regardless of whether their OTC counterparty was a commercial trader or a speculator. Those two categories of what has been reported as 'commercial' traders are separately reported in the Disaggregated COT. The "non-commercial" category of the legacy COT included professional money managers (CTAs, CPOs, and hedge funds) as well as a wide array of other non-commercial (speculative) traders. These two categories of what has been reported as "non-commercial" traders are separately reported as "money managers" and "other reportables" in the Disaggregated COT.

(Information provided by the CFTC.)

All of the COT reports provide a breakdown of each Tuesday's open interest for markets in which 20 or more traders hold positions equal to or above the reporting levels established by the CFTC.

When graphically shown on charts, you actually see what is referred to as the Net Traders Positions which is the actual difference between the number of long positions held by each group minus the number of short positions. Thus a positive number means they hold more long positions than short and vice versa.

Time Period: Weekly chart

The four types of positions are shown on the chart are:

• Producers (red line) - includes Producer/Merchant/Processor/Users
• Swap Dealer (green line)
• Managed Money (blue line)
• Other Reportables (yellow line)

Sample Chart: