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June 28, 2018
Hedging & Options
Commitment of Traders in the CME Live Cattle Futures Contract
The CFTC publishes a Commitment of Traders Report (COT) weekly for several futures
contracts, including the CME Live Cattle Contract.9 COT reports contract open interest and
details trading entity long and short positions in the contract. The disaggregated version of
COT10 defines the following categories of traders:
1. Producer/Merchant/Processor/User
2. Swap Dealers
3. Managed Money
4. Other Reportables
Any open interest above and beyond that held by these four categories of traders is attributed
to Non‐Reportables and assumed to be held by traders whose positions are not large enough to
require them to report. The categories are defined by how the CFTC perceives the activity of a
certain trader. We offer brief descriptions of each below. Details are available from the CFTC
website.11
Producer/Merchant/Processor/User: Traders whose business depends on the physical
commodity underlying the futures contract. As such, positions held by this group are generally
assumed to be hedges and the group is referred to as hedgers or commercial hedgers.
Swap Dealers: Swap dealers are also technically using the futures market to hedge risk.
However, their business does not depend on the underlying commodity. Rather, they are
hedging the risk of swap transactions made with clients.
Managed Money (or Money Manager): Traders who engage in organized futures trading on
behalf of clients. Hedge funds fall into this category.
Other Reportables: This category consists of all traders with positions large enough to require
reporting who do not fall into the preceding categories. In general, traders in the Other
Reportables category are considered to be large speculative traders.
Non‐Reportables: Traders whose holdings do meet the threshold for mandatory reporting. In
general, traders in the Non‐Reportables category are considered to be small speculative
traders.
9Details regarding the Commitment of Traders report, its scheduled release, and links to archived COT data are
available at: http://www.cftc.gov/MarketReports/CommitmentsofTraders/index.htm.
10 CFTC. “Disaggregated Commitment of Traders Report: Explanatory Notes.” Available at:
http://www.cftc.gov/idc/groups/public/@commitmentsoftraders/documents/file/disaggregatedcotexplanatoryno
t.pdf.
11 CFTC. “Disaggregated Commitment of Traders Report: Explanatory Notes.” Available at:
http://www.cftc.gov/idc/groups/public/@commitmentsoftraders/documents/file/disaggregatedcotexplanatoryno
t.pdf.
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