Who are nifty commitment traders?
Nifty Commitment of Traders (COT) refers to the report that shows the positions held by different groups of traders in the Nifty 50, an index of 50 stocks listed on the National Stock Exchange of India (NSE). The groups of traders include commercial traders, non-commercial traders, and retail traders. The Nifty COT report is used by traders and investors to gauge the market sentiment and make informed trading decisions.
What is the Activity of COT Traders?
Commercial traders
This group consists of large institutional traders, such as hedge funds, banks, and commodity trading advisors. They use futures contracts for hedging purposes and are typically seen as having a longer-term view of the market.
Non-commercial traders
This group consists of speculators, who trade futures contracts for profit. They are seen as having a shorter-term view of the market and tend to be more active in their trading.
Retail traders
This group consists of individual traders who trade futures contracts for personal investment purposes. They are usually seen as having a relatively short-term view of the market.
By analyzing the positions held by these groups of traders, market participants can get a better understanding of the underlying market sentiment and make informed trading decisions. For example, if the commercial traders are heavily short (betting on a price decline), while the non-commercial traders are heavily long (betting on a price increase), it may indicate a potentially bullish market sentiment.
