The OI went up in the pound by 5739 contracts

Legend: Net Long Net Short Position Change

Overview: During the period the open interest (OI) of the eight futures contracts reviewed went up 12,491 contracts. The biggest increase was 16,135 contracts in the C$. There, the large spec aggressively sold the contract and flipped to a short position. The OI also went up in the pound by 5739 contracts as both the small and the large specs were heavy sellers. OI went down by over 4000 contracts in the DI and the euro and over 5000 contracts in the A$.

The total USD spec positions remained short 79,766 contracts, down from129,687 in the previous week and down from 190,610 four weeks ago. This is calculated by taking total spec positions in a futurescontracts. If, for example, this week they are long 52,441 contractsin the Aussie dollar, that means they are short that amount of USDcontracts. Those contracts are traded in and priced in dollarstherefore a long A$ is a short USD position. For the past four weeksthe spec position in the USD has been going down. The spec increasedhis USD long positions versus the euro and the pound this period.

Small specs had the biggest percentage long positions in the C$, 33.3%,the SF, 29.2%, and the A$ with 23.3% of the total market. The largestspec short positions were in the eurp 23.4% of the total OI, and theyen with 23% of the total.

Large specs once again had the biggest percentage positions in the DI,69.5%, the NZ$, 60.7% and the A$ at 49.4%. The biggest large specshort percentage positions were in the C$, 24.3%, and the euro at 23.4%.

It is an uncommon occurrence when a group flips from one position toanother. This week we had the large spec flipping to the short side ofthe C$. In the pound, the small spec aggressively joined the largespecs on the short side of the pound.

Analysis: There was orderly trade liquidation during the period by speculators. The large spec reduced his long position by over 4200 contracts. His sport position in the DI was already small and he reduced it by over half of the previous total. The large spec remains a 7.7 to 1 long. Small specs also remain long by a 2.6 to 1 margin.

Analysis: The euro OI is over 12 times larger than the DI, yet the change in the OI was about the same. Spreading increased 1,568 contracts to 14.4% of the total OI, but there was little change in euro positions. Note the small spec's percentage of the long and short position is about the same.  Both groups of specs reduced their long euro positions by over 3000 contracts during the period.

Analysis: Despite only a modest increase in the OI, there was a decisive shift by the specs to the short side of the pound. The large spec was already short and expanded that position by decreasing longs and adding shorts. The small specs flipped, aggressively, from long to short. Neither  spec group is an unbalanced short, so there may be more selling pending.

Analysis: The change in total OI for the period was small 33 contracts. With the government threatening to take action to weaken the yen, specs reduced some long positions. The large spec remains a 5 to 1 long, but the small specs continues to be short the yen.

Analysis: One of the experts commented this week that the SF was the new mark, and the SF would remain firm for the next decade. Small specs did add to their long, and the large specs are about a 2.5 to 1 long. OI is large as specs favor this currency as opposed to the euro and perhaps the USD.

Analysis:  A peculiar week for the loonie. There was a sizable increase in the OI as the large spec sold heavily and flipped his position from long to short in the C$. With a large evenly balanced long to short in the big spec position, this will probably either be given up on an exchange, or liquidated prior to expiration of the Sept contract. Small specs have not followed the lead of the big traders and remain almost a 2 to 1 long.

Analysis: The large spec did peel out of a big part of his long and the commercial faded the trade. Really no feature in this very small market.

Analysis: There was a small reduction in the OI with the large spec scaling back his long. He still remains a 5 to 1 long. With the recent strength in the A$ it is surprising to see the OI was not building. The small specs are becoming more actively involved, but still remain fairly evenly balanced. Spreading is now up to 4.7% of the total OI indicating a pick up in option trading.