Every week the Commodities Futures Trading Commission (CFTC) publish their Commitments Of Traders report (COT) to "help the public understand market dynamics". From this, we take the data that relates to speculators and produce the Market Positioning report. This report tracks and charts net long or net short positioning in a wide variety of assets, including key equity indices, bonds, currencies and commodities.
When markets trend in one direction for long periods of time, the portfolio positioning of speculators and other market participants often becomes crowded, with most players holding the same position. When that becomes extreme it often pays to do the opposite. At times like these the trend often breaks sharply as the crowd panics and runs for the exit. Ahead of panic, options pricing for contrarian trades is also typically very attractive.
In our Market Positioning report we will help you identify extremes in positioning and make lucrative and timely moves against the running crowd. In the words of Michael Steinhardt:
“I defined variant perception as holding a well-founded view that was meaningfully different from market consensus. …. [It is] also critical to have a keen understanding of what the market expectations truly were".