The Commodity Futures Trading Commission (CFTC) provides inside information about purchases and sales of futures contracts. The largest players in each market are required to disclose their positions to the CFTC on a daily basis and this report is released on a weekly basis. These traders are separated into Commercial Hedgers and Large Traders/Managed Money.
The positions of Small Traders are calculated by subtracting the total of contracts held by the reporting groups from all the contracts outstanding (Small traders are not required to report their positions). Managed Money are futures market participant who engages in futures trades on behalf of investment funds or clients. While Managed Money are commonly equated with hedge funds, they may include Commodity Pool Operators and other managed accounts as well as hedge funds.
They tend to be early, but they are usually right on the long run. Extreme divergences in the net positions of large traders (managed money) and the price of the underlying security have proven to be reliable indicators of important trend changes.
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