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EXPERT VIEW: Commitments of traders reports are not fit for purpose – Marex Spectron
October 30, 2013 - 16:16 GMT
commitment of traders
Amid expectations that the London Metal Exchange will produce its own commitments of traders (CoT) reports, Marex Spectron’s head of analytics sales, Vicky Sanders, cautions that such methods are no longer fit for purpose.
CoT reports were first produced as far back as 1924, and
went monthly in the 1960s. The move was proclaimed as "another
step forward in the policy of providing the public with current
and basic data on futures market operations". Over 50 years on,
and it's a fair question to ask whether these reports still
carry the same merit, or whether financial markets have passed
them by. The reliance upon them as sources of information, and
the esteem in which they are held, seems to emanate almost
solely from historical practice. It is time to assess whether
market participants can continue to believe they are well
served by them. Financial markets have evolved considerably
and, we would argue, beyond this methodology. Speed of delivery
Even if the methodology were valid, the speed of delivery is
positively archaic. Markets now trade at the speed of
nanoseconds, which means that a weekly...
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