Commercial Trader

A classification used by the Commodity Futures Trading Commission (CFTC) to describe traders that use the futures market primarily to hedge their business activities. This classification is composed of futures commission merchants, foreign brokers, clearing members or even investment banks who are using a trade for hedging purposes.

An investor can see the positions of commercial traders from the CFTC reports. It is believed that if commercial traders are increasing or decreasing their position in a security, it may foretell future trends but this may not be justified.

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