Market News & Analysis

Top Story

Weekly COT Report: Net-Short Exposure To VIX Hits A New Record

Read our guide on how to interpret the weekly COT report

As of Tuesday 19th November:

  • Large speculators were net-long USD by $17 billion, up by $2.7 billion from the prior week
  • Yet net-long exposure for the dollar index fell to a 20-week low
  • CAD futures saw the largest weekly change with net-long exposure falling by -13.4%
  • Bears capitulated on NZD futures yet bulls remained side lined

DXY: Net-long exposure for the dollar index fell to a 20-week low, making it the 7th consecutive week of reduced long-exposure. Yet prices remain supported, so there’s clearly a divergence between large speculators and the broader market. This means on of the two groups is wrong and will no doubt be caught on the wrong side of a trade. Technically, a swing low has formed at 97.68 which was reaffirmed with Friday’s 0.3% rally. So DXY is on track to follow its seasonal tendency to finish higher for the month, but we’re also keeping in mind December tends to be bearish for the buck. So perhaps upside could be limited.

CAD: Large speculators reduced long exposure for a 2nd consecutive week, and that was a day before BOC’s Deputy Governor weakened the Canadian dollar with dovish remarks. Still, As Mark Carney later made a neutral stance regarding policy, CPI data came in as expected and retail sales surprised to the upside, CAD bulls were able to pare losses by the end of the week. As it stands, CAD remain net-long and we’re approaching December, a month which is typically bearish for USD, which could help support CAD if domestic data goes the right way.

NZD: Gross shorts were closed at their fastest rate in 3-months ahead of RBNZ’s meeting, where they opted to hold rates. As net-short exposure is still near historical levels, we remain on high alert for capitulation from the lows and for NZD to strengthen. Yet the vital ingredient that is missing is long interest. Whilst short-covering ticks one box, we’d like to see long interest pick up to confirm our view that a reversal could be underway.  

As of Tuesday 19th November:

  • Large speculators were their most bullish on WTI in 5-month highs (yet diverge with managed funds)
  • VIX traders hit a new record of et-short exposure
  • Traders are their least bullish on palladium in 3-months

WTI: Large speculators were their most bullish on WTI in 5-months. Yet its worth noting that they’re in disagreement with managed funds, where net-long exposure was reduced for the first time in 5-weeks. Shedding -25.45k contracts form net-long exposure, it was the largest change in 6-weeks and fuelled by a closure of gross longs and gross shorts. We’ll need to wait to see which group of traders is correct, but ideally we’d prefer to see them in agreement before being more confident in their positioning.

Technically, WTI sold off from 58.77 resistance on Friday which leaves potential for a near-term top. Ultimately, 58 could prove to be a pivotal level for bulls and bears to plan their traders around.

VIX: Net-short exposure on VIX hit a fresh record, which raises the potential for volatility to spike as we head into December. Looking at data over the past 30-years shows that November is typically a month of low volatility, losing -4.2% on average and closing lower 65.2% of the time. December has an average return of +1.3% and closes higher 51.7% of the time which is not a compelling enough reason to assume Armageddon next month, but with traders currently short volatility at record levels, it could pay to be nimble.


This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.