The Regular Trader

Overview of the COT Report

The Commitments of Traders (COT) report for USD Index futures (ICE Futures US, contract size: US Dollar Index × 1,000, CFTC Code #098662) as of September 23, 2025, provides a snapshot of positioning in the market. This data is released weekly by the CFTC and reflects positions as of the preceding Tuesday (September 23 in this case). Key headline figures:

Total Open Interest (OI): 40,441 contracts (+1,915 week-over-week, or +5.0%, indicating increased market participation and potential building conviction).
Total Traders: 117 (stable, suggesting steady involvement from major players).
Market Sentiment Tilt: Speculative categories (Asset Managers, Leveraged Funds, Other Reportables, and Nonreportables) are collectively net short by approximately 18,383 contracts, while commercials (Dealers/Intermediaries) remain heavily net long by 18,675 contracts. This classic "commercials vs. specs" divergence often signals contrarian potential, with commercials (hedgers) positioned bullishly against specs (trend-followers betting on USD weakness).

The report shows a modest increase in OI driven by additions across most categories, but with mixed directional changes. Speculative shorts eased slightly in Leveraged Funds (less aggressive bearishness), but Asset Managers added to their short bias. Below, I'll break down the data, net positions, changes, and implications.

Positions by Trader Category

Here's a cleaned-up summary table of non-spreading positions (longs and shorts), spreading positions, and their share of total OI. Changes from the prior week (September 16, 2025) are noted where discernible from the report; positive changes in green, negative in red.

Category	Long Positions	Long % of OI	# Long Traders	Short Positions	Short % of OI	# Short Traders	Spread Positions	Spread % of OI	# Spread Traders	Net Position (Long - Short)
Dealer Intermediary (Commercials/Hedgers)	18,675	46.2%	5	0	0.0%	0	0	0.0%	0	+18,675
Change	-157	-	-	0	-	-	0	-	-	-157
Asset Manager/Institutional (Large Specs)	2,018	5.0%	9	11,166	27.6%	18	1,979	4.9%	4	-9,148
Change	+483	-	-	+1,183	-	-	N/A	-	-	-700
Leveraged Funds (Hedge Funds/Specs)	11,700	28.9%	18	16,912	41.8%	30	879	2.2%	4	-5,212
Change	+1,327	-	-	+633	-	-	+23	-	-	+691
Other Reportables (Mixed/Others)	2,441	6.0%	16	5,725	14.2%	21	44	0.1%	0	-3,284
Change	+327	-	-	+138	-	-	-55	-	-	+189
Nonreportable Positions (Small Traders)	2,785	6.7%	N/A	3,736	9.2%	N/A	0	0.0%	N/A	-951
Change	-71	-	-	+320	-	-	0	-	-	-391
Totals	37,619	92.9%	48	37,539	92.8%	69	2,902	7.2%	8	Commercials +18,675; Specs -18,383

Notes:

Percentages sum to ~100% across non-spread longs (~92.9%), non-spread shorts (~92.8%), and spreads (~7.2%), as spreads count toward both sides of the market.
Minor discrepancies in totals (e.g., longs at 37,619 vs. shorts at 37,539) are due to rounding in the original report.
Net positions exclude spreads, as they are market-neutral (each spread contract is simultaneously long and short).

Long vs. Short Breakdown (Visual Summary)

The report includes stacked bar charts emphasizing the long/short balance:

Overall: Shorts dominate in speculative categories (red bars larger in Asset Mgr, Lev Funds, Other, Nonrep), while Dealers show a pure green long bar.
Key Visual Insight: The speculative side's short skew is evident, but the OI surge suggests fresh capital entering—potentially specs doubling down or commercials defending their long bias.

Category	Long Stack (Green)	Short Stack (Red)
Dealer	100% Long	0% Short
Asset Mgr	~15% Long / 85% Short (incl. spread)
Lev Funds	~40% Long / 60% Short
Other Rep	~30% Long / 70% Short
Nonrep	~43% Long / 57% Short

Key Changes and Trends

OI Expansion (+1,915): Driven primarily by Leveraged Funds (+1,327 long +633 short +23 spread = +1,983 net addition) and Asset Managers (+483 long +1,183 short = +1,666 net). This points to heightened interest, possibly tied to volatility in FX markets (e.g., Fed policy expectations or global risk-off flows around late September 2025).
Directional Shifts:
- Bullish Signals: Leveraged Funds reduced their net short bias (+691), hinting at some covering or profit-taking on prior dollar weakness. Other Reportables also trimmed shorts slightly (+189 net).
- Bearish Signals: Asset Managers piled on shorts (+700 net deeper), aligning with institutional caution on USD strength. Nonreportables turned more bearish (-391 net), often a retail "crowd" indicator.
- Commercial Stability: Dealers trimmed longs modestly (-157), but their massive net long remains a anchor—hedgers (e.g., exporters) likely locking in gains amid dollar rallies.
Trader Concentration: Low trader counts in Dealers (5 longs) vs. higher in specs (e.g., 30 short in Lev Funds) suggest concentrated bets, increasing risk of sharp reversals if triggered.

Market Implications and Sentiment

Speculative Bearishness on USD: Large specs (Asset Mgr + Lev Funds) hold a combined net short of ~14,360 contracts—the most bearish since mid-2025 peaks. This reflects bets on USD depreciation, possibly driven by anticipated Fed rate cuts, softening US data, or euro/yen strength. Historically, extreme spec shorts in the Dollar Index have preceded bounces (e.g., Q4 2024 reversal from -20k net short).
Commercial Counterweight: The Dealers' +18,675 net long is a strong bullish contrarian signal. Commercials often "win" in COT dynamics, as they hedge real flows (e.g., US import/export imbalances). If specs are overextended short, this setup favors a USD rebound—watch for OI to stabilize or specs to cover.
Broader Context: With OI at multi-month highs, the market is "hot" but imbalanced. Volatility could spike if geopolitical events (e.g., US election noise) or data (e.g., October NFP) shifts sentiment. Short-term: Mildly bullish USD on spec fatigue. Medium-term: Monitor next week's report (Oct 1 data) for spread unwinds or further Lev Fund covering.
Risks: Low liquidity in some categories (e.g., 0 Other spread traders) could amplify moves. Always cross-reference with spot DXY levels (~102-104 range in late Sept 2025) and correlated assets like 10Y yields.

Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. The COT report is a lagging indicator, reflecting positions from the previous Tuesday.