The COT screener and the note at the top of every contract page's COT section boil the CFTC report down to a few labels: Bullish setup, Hedgers max short, Funds crowded long, Fast shift. This guide explains exactly how each label is calculated, why the screener reads hedgers and funds in opposite directions, where that logic works well and where it does not – and what a label never tells you.
This week 16 of 53 markets carry a label: 5 setups, 6 with only the hedgers and 5 with only the funds at a 3-year extreme. Another 4 show a fast shift without an extreme. See the full list in the COT screener.
The two groups the screener watches
Each market is reduced to two trader groups from the CFTC report. Which two depends on the report the CFTC publishes for that market – and in Treasury, Bitcoin and Ether futures only one of them is used:
| Commodities (Disaggregated report) | Financial futures (TFF report) | |
|---|---|---|
| “Hedgers” | Producers/Merchants – farmers, miners, refiners, merchants hedging physical business | Dealers – banks on the sell side of swaps and other client business, which they largely offset |
| “Funds” | Managed Money – mostly trend-following and discretionary funds | Leveraged Funds – hedge funds, including trend followers but also arbitrage and relative-value trades. Not used in Treasury futures (see below) |
| How reliable | The classic case the method was built for | Weaker: labels come with a caveat on the contract page |
“Hedgers” and “funds” are FuturesSpecs' shorthand, not CFTC terms. They describe commodities well and financial futures only loosely, which is why this guide treats the two separately.
Commodities: the classic case
Producers and merchants are not trying to forecast price. A grain merchant sells futures when farmers deliver, an oil producer locks in prices after a rally. In most commodities this group is net short all the time, because hedging a crop or an oil field means selling forward. So their position swings between “heavily short” after a big rise and “much less short” – sometimes net long – after prices have fallen hard. Trend-following funds do roughly the opposite: their positions grow with the trend and are often largest when it tires. In commodities the two groups do sit on opposite sides of the market most of the time, and the screener reads a high hedger reading as bullish and a high fund reading as a warning.
Financial futures: same side, different counterparty
In financial futures that picture does not hold. Dealers run largely matched books, and Leveraged Funds include large arbitrage positions. Very often both groups are net short at the same time, and the main long holders are asset managers – pension funds, mutual funds, insurers – a group the screener does not use. In the S&P 500 E-mini and in every Treasury future from the 2-year note to the Ultra Bond, dealers and leveraged funds have been net short in every week of the past three years (CFTC data as of October 2026).
The screener still works with these two groups because the COT Index compares each one only with its own history. A “setup” therefore means each group is at the opposite end of its own range – not that they are on opposite sides of the trade. That is useful information, but weaker than in commodities, and contract pages in financial futures carry a note saying so. Asset managers' positions are shown on each contract page.
Treasuries need extra care. A large part of the Leveraged Funds' short position in Treasury futures comes from the basis trade: funds sell futures and hold the matching bonds, financed in the repo market, to earn the small price gap between the two. That is arbitrage, not a bet on falling bond prices. A fund extreme in these markets mostly tells you how big the basis trade is – reading it as bullish or bearish would be guesswork.
The screener therefore ignores the Leveraged Funds' reading in the six Treasury futures (2-year, 5-year, 10-year, Ultra 10-year, Bond, Ultra Bond) and in Bitcoin and Ether futures, where funds often hold the short futures leg of a similar trade against the coin or crypto ETFs and have been net short in almost every week of the past three years. Their COT Index is still shown on the contract page and in the screener table, but it does not create a label, cannot turn a dealer extreme into a setup and does not count as a fast shift. In these markets the only labels you will see are Hedgers max long and Hedgers max short, based on the dealers alone. Short-term rates (Fed funds, SOFR) are not affected – the basis trade is a Treasury note and bond business.
The yardstick: a 3-year COT Index
Raw net positions cannot be compared across markets – or even within one market, because some groups are structurally long or short. The screener uses the COT Index, which places this week's net position (longs minus shorts) inside the group's own range:
The window is the last 156 weeks, roughly three years. A reading of 100 means the group is as net long as at any point in that period, 0 as net short as at any point. The index measures the size of the position, not this week's buying or selling. For a group that is always net short, 100 simply means “least short in three years”. Contract pages also show a faster 26-week index; the screener deliberately uses the slow one, because a 3-year extreme is rarer and less likely to be noise. If you want the basics of the report itself first, read How to read the COT report.
What counts as an extreme
The screener treats a reading of 90 or higher as a long extreme and 10 or lower as a short extreme. The numbers are rounded the way the page shows them, so a 10.4 counts as 10. Those cut-offs are stricter than the 80/20 shading on the COT overview on purpose: the overview gives a broad picture, the screener should only flag the top and bottom tenth of a group's range.
The labels
There are six directional labels, one label for contradicting readings and one alert for fast moves. Each market gets at most one label. The screener checks in this order and stops at the first match:
- Both groups at opposite ends of their range → Bullish or Bearish setup
- Both groups at the same end → Mixed extremes
- Only the hedgers at an extreme → Hedgers max long or max short
- Only the funds at an extreme → Funds crowded long or crowded short
- No extreme, but a 6-week move of 40 points or more → Fast shift
In Treasury, Bitcoin and Ether futures only steps 3 and 5 can apply, and step 5 only for the dealers, because the funds' reading is not used there. Because only one label is shown, the screener table and the contract page always show both index values as well – you can see the other group's reading even when it did not decide the label. The counts at the top of the screener (hedger extremes, fund extremes, surges) overlap: a setup counts as a hedger and as a fund extreme, and a labelled market can have a surge too.
Bullish setup
Hedgers at 90 or above and funds at 10 or below. In commodities this means producers and merchants hold their smallest net short (or largest net long) of the past three years while the trend followers have sold out or gone short. COT traders since Larry Williams and Stephen Briese read this as the strongest bullish positioning a market can show. It is the strongest label the screener gives – with the caveats for financial futures above.
Bearish setup
The mirror image: hedgers at 10 or below, funds at 90 or above. In commodities, producers and merchants are hedging forward sales as heavily as at any point in three years while funds are crowded on the long side. In financial futures it means dealers are at the short end of their range and leveraged funds at the long end of theirs.
Mixed extremes
Both groups at the same end of their range – both at 90 or above, or both at 10 or below. Read the screener's way, the hedger reading would be bullish and the fund reading bearish (or the other way round), so the label gives no direction. In commodities this is rare. In financial futures, where dealers and leveraged funds often move together, it is a reminder that the hedger-versus-fund logic does not fit every market.
Hedgers max long and Hedgers max short
Only the hedgers are at an extreme; the funds are somewhere in between. It leans in the hedgers' direction – bullish when they are max long, bearish when they are max short – but without confirmation from the other side. Sometimes this is an early stage in which the funds follow later; often they never do.
Funds crowded long and Funds crowded short
Only the funds are at an extreme. The screener reads this against the funds: crowded long leans bearish, crowded short leans bullish. Treat it as a warning rather than a trigger. A crowded trade can keep working for a long time, but when the trend stalls, everyone heads for the same exit – crowded shorts in particular can fuel sharp short-covering rallies. This label does not appear in Treasury futures, where the funds' reading is not used.
Fast shift
No 3-year extreme, but one of the two groups moved its 3-year COT Index by 40 points or more over the last six reports, up or down (Briese's Movement Index). This is not a directional label. It says positioning is changing quickly, which can happen at the start of a new trend or when a crowded position unwinds. Look at which group moved and in which direction on the contract page's chart. Markets that already carry a label can have a fast shift too; the screener lists those under “Biggest 6-week shifts”.
“New this week” vs. “N weeks in a row”
The age tag counts how many consecutive weeks the label's condition has held. For hedger labels that is the hedgers' streak in the extreme zone, for fund labels the funds' streak. For setups and mixed extremes both groups have to be in their zone, so the tag shows the shorter of the two streaks – how long the combination itself has existed. New this week means the condition appeared with the latest report; 5 weeks in a row means it has held for five weeks.
Neither is better in itself. A fresh extreme is the point traders usually start watching a market. A long streak shows how persistent positioning can be – and is the best reminder that an extreme is a condition, not a date. Positions often stay stretched for weeks while the trend continues. A common rule of thumb in the COT literature is to wait until the readings start to leave the zone rather than act when they enter it; FuturesSpecs has not tested that rule.
How traders use the signals
The screener answers one question: which markets are worth a closer look this week? A typical routine looks like this. After the weekly release – normally Friday, moved to the next business day (sometimes a Monday) in holiday weeks – scan the screener for setups and fresh extremes. Open the contract page and check the COT Index chart – is the group at a new extreme or has it been there for months? Do the 26-week and 3-year readings agree? In financial futures, look at the asset managers' card too. Then switch to the price chart and wait for price to confirm: a break of a recent swing high or low, a moving average that turns, a failed new high. Without that confirmation the COT reading is context, not a trade.
Two habits help. First, compare each market only with its own history – a “max long” in corn and a “max long” in the euro are not equally strong; they are each extreme for their own market. Second, check the roll calendar and the key reports on the contract page: a WASDE or an inventory report can trigger the move that positioning has been setting up. How futures react to scheduled reports explains what to expect on those days.
Limits you should know
- The data is three days old when it comes out (positions as of Tuesday, published Friday or later in holiday weeks) and only weekly. The release dates are in How to read the COT report.
- Three years is a choice. A market whose structure changed recently – a new contract, a big shift in who hedges – can show extremes that are really just a new normal.
- Financial futures are a weaker case. Dealers and leveraged funds are often on the same side, dealer positions reflect client flow, index arbitrage and option hedging, and leveraged funds include basis and relative-value trades. Extremes in stock indexes, Treasuries, currencies and crypto carry less meaning than in grains, livestock, metals or energy.
- Treasury fund shorts are mostly arbitrage. The basis trade can keep leveraged funds near record shorts for years without saying anything about the direction of bond prices. That is why the screener leaves their reading out in Treasury futures and, for the same reason, in Bitcoin and Ether futures.
- No signal means no extreme – not that positioning is irrelevant. A move from 15 to 60 can matter more than a reading stuck at 92.
- The labels are not backtested here. The idea that commercial extremes come near turning points is the core claim of the COT literature (Williams, Briese). FuturesSpecs applies the method but has not published its own test of it. Extremes have also appeared in the middle of long trends.
Where the method comes from
The COT Index was made popular by Larry Williams (Trade Stocks & Commodities with the Insiders, 2005) and Stephen Briese (The Commitments of Traders Bible, 2008), who both read commercial hedgers against large speculators – a framework built mainly on commodity markets. The Movement Index comes from Briese. The screener's thresholds, labels and order are FuturesSpecs' own simplification of that approach, applied the same way to every market. The raw data and the group definitions come from the CFTC; all figures are futures only.
Next step: open the COT screener to see which markets are at an extreme right now, or the COT overview for every contract on one page.
Educational content only – not investment advice. Futures trading involves substantial risk of loss.