Great piece as always! Answered a few questions for me but one thing i still don’t understand: i get that the commercials category in commodity futures is closer to fundamentals and therefore has informational advantage. But why would the commercials in equity futures be better informed than large specs? Thanks 🙏
Yes, that one is debatable! Especially if you consider that commercials in equity-land are mostly financial institutions that delta-hedge. In my opinion, that's why CoT data can be less reliable for equity futures, but it still provides useful information at market extremes, particularly regarding large and small speculators.
Great piece as always! Answered a few questions for me but one thing i still don’t understand: i get that the commercials category in commodity futures is closer to fundamentals and therefore has informational advantage. But why would the commercials in equity futures be better informed than large specs? Thanks 🙏
Yes, that one is debatable! Especially if you consider that commercials in equity-land are mostly financial institutions that delta-hedge. In my opinion, that's why CoT data can be less reliable for equity futures, but it still provides useful information at market extremes, particularly regarding large and small speculators.