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COT Index
Where commercial traders' net position sits within its own 3-year range, from 0 (most net-short) to 100 (most net-long).
What it is
The COT Index takes commercials' net position (longs minus shorts) from the weekly CFTC report and places it within its range over the last 156 weeks: (net − 3-year low) ÷ (3-year high − 3-year low) × 100. Above 80 is the bullish zone, below 20 the bearish zone, and 20–80 is neutral.
Why it matters
Commercials hedge real physical business, so when they are as net-long (or net-short) as they have been in years, it often marks value at extremes. The index makes that comparable across markets with very different position sizes.
How traders use it
Treat the zone as a directional bias, then check the stage: fresh (under 4 weeks in the zone), developing (4–12 weeks), mature (over 12 weeks), or fading (recently left a zone and crossed back past 50). Combine with seasonality and price action for timing.
Example
Gold's COT Index at 86 for 6 weeks → bullish zone, developing. Oil at 15 for 2 weeks → bearish zone, fresh. Corn at 55 after leaving the bullish zone → fading.
Deeper context
The index is a level reading, not a forecast of next week's price. A 3-year window adapts to structural change in each market but means the range itself moves over time. The stage adds persistence: a fresh reading can still flip, while a mature one has held through several reports. Read the as-of date on the COT panel so you know which CFTC week you are seeing.
Common mistakes
Assuming 85 means “buy now”; ignoring the stage; forgetting that commercials can stay at an extreme for months while price keeps trending.