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  • 8.9.7-FUTURES MARKETS-POSITIONS

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  • Positions

     
     

    Open position is the number of contracts registered by the clearing house which are not offset by other contracts or tenders when the contracts become spot (the nearby contract month). For example, a coffee trader may have a position with the clearing house of 30 purchase contracts and 40 sales contracts. Some of the purchases and sales may be for the same delivery month but the trader may have labeled them as 'wait for instructions' if those contracts represent separate hedging transactions for that trader. This means the trader will enter into additional futures deals to offset them once they unwind the physicals against which the original hedge was taken. In other words, the open position of that particular operator remains 70 lots until some of the contracts are offset or 'washed out'.

    The clearing house reports only the total of all operator positions, rather than that of any one member, which is left to the broker to report. The CFTC's commitment of traders (COT) report breaks down the total open interest on the New York 'C' contract by category of traders. Large traders are called reportable, while small traders are non-reportable. The COT report then further breaks down the open interest by commercial and non-commercial reportable traders. It is a very handy tool for exporters to get an idea of the long or short positions of the large speculative hedge funds.