COT Report and Open Interest

[trendie]

How does the Commitment of Traders (COT) Report give an edge?
How does Open Interest give an edge?

I found a page that gives some insights as to how the overall open interest (when used in context of COT) gives some hint as to direction, and possible reversal.

Commitment of Traders

I have also found a page relating to options open interest.

Using open interest and volume to analyze trends in the futures market

If I understand it, prices may be manipulated so that the strike prices at expiry may expire either worthless or in the money.
Does knowing the volume of options and the expiry help to gauge what price a market might be "driven" to, in order to protect an option?
and indeed, the date by whoch is must happen by!!

Is this level of extra information worthwhile?

Reason for asking, is since Price Action is primary data, and all indicators are secondary views of price, and volume is seen as the only other non-price indicator, I wonder whether COT and Open Interest is useful as the values are not a derivation of price or volume, and thus are legitimate alternative indicators of broad market behaviour.

Alternatively, it could all be excessive work for little extra reward.

Discuss.

 

[fibonelli]

I find it's usefulness is in identifying those contracts where there are extreme readings in the commercials and professionals and the direction of open interest at these extremes. It's almost like a sentiment index.

The data would be more useful for swing and position traders as we're identifying multi week/month trends.

Obviously, the contract must be liquid and you need to know who the commercials represent. You can't assume anything as each contract has different characteristics.