# Sentiment Data

> Sentiment data measures how optimistic or fearful investors are. Learn survey, positioning, options and crypto sentiment indicators and how to use them.

Source: https://learn.tradelabsai.com/alternative-data/sentiment-data/  
Track: Data and Alternative Data · Level: Intermediate · Updated: 2026-10-03  
Publisher: TradeLabs AI (https://tradelabsai.com). Education, not financial advice.  
Cite as: TradeLabs Learn, "Sentiment Data", https://learn.tradelabsai.com/alternative-data/sentiment-data/

Markets are driven by people, and people swing between greed and fear. Sentiment data tries to measure that mood: how bullish or bearish investors are, how they are positioned and how much protection they are buying. Sentiment indicators are most often used as contrarian signals, on the idea that when nearly everyone is bullish, there are few buyers left, and when nearly everyone is fearful, much of the selling may be done. They are useful context but poor timing tools on their own.

## Types of sentiment data

| Category | Examples |
|---|---|
| Surveys | AAII Investor Sentiment Survey, Investors Intelligence, fund manager surveys, consumer confidence |
| Positioning | CFTC Commitments of Traders, short interest, fund flows, margin debt |
| Options based | Put call ratio, VIX, skew, open interest |
| Market breadth | Advancing vs declining stocks, new highs vs new lows |
| Crypto specific | Funding rates, open interest, long short ratios, Fear and Greed indices |
| Text based | News and social media sentiment. See [Social and News Sentiment](https://learn.tradelabsai.com/alternative-data/social-and-news-sentiment/) |

## Survey indicators

The American Association of Individual Investors (AAII) asks members weekly whether they are bullish, bearish or neutral on stocks over the next six months. Its long run average bullish share has been around 37% to 38%. Extremes, such as bullish readings above 50% or bearish readings above 50%, have sometimes coincided with turning points.

Bank of America's Global Fund Manager Survey tracks professional investors' cash levels and positioning; very high cash levels have often been read as a contrarian bullish signal.

## Positioning data

| Data | Source | Signal |
|---|---|---|
| Commitments of Traders | CFTC weekly report on futures positions | Crowded speculative longs or shorts in currencies, commodities and indices |
| Short interest | Exchanges, twice monthly in the US | High short interest can fuel squeezes |
| Fund flows | Data providers tracking mutual funds and ETFs | Heavy inflows or outflows at extremes |
| Margin debt | FINRA | High leverage in rising markets |

**Example: A crowded yen short**
CFTC data shows speculative net short positions in yen futures at multi year highs, while USD/JPY has risen steadily for months. When a surprise Bank of Japan policy change hits, shorts rush to cover, and the yen jumps sharply. Extreme positioning did not predict the date of the reversal, but it showed how violent a reversal could be. See [Carry Trades in Forex](https://learn.tradelabsai.com/forex/carry-trades-in-forex/).

## Options based sentiment

- **Put call ratio:** high ratios signal fear or hedging. See [Options Open Interest Analysis](https://learn.tradelabsai.com/options/options-open-interest-analysis/).
- **VIX:** high readings signal fear; very low readings signal complacency. See [The VIX](https://learn.tradelabsai.com/volatility/the-vix/).
- **Skew:** the cost of downside protection relative to upside. See [Volatility Smile and Skew](https://learn.tradelabsai.com/volatility/volatility-smile-and-skew/).

## Crypto sentiment

| Indicator | Meaning |
|---|---|
| Funding rates | Extreme positive funding means crowded leveraged longs. See [Funding Rates](https://learn.tradelabsai.com/crypto/funding-rates/) |
| Open interest | Rising leverage in derivatives |
| Long short ratios | Share of accounts long vs short on exchanges |
| Crypto Fear and Greed Index | Composite of volatility, momentum, social data and other inputs |

## Using sentiment well

1. **Focus on extremes,** not small changes.
2. **Combine with price:** contrarian signals work better when price starts confirming a turn. See [Market Structure Basics](https://learn.tradelabsai.com/price-action/market-structure-basics/).
3. **Use as risk context:** crowded trades are vulnerable to sharp reversals.
4. **Mind the horizon:** sentiment can stay extreme for long periods in strong trends.
5. **Test before relying on it:** many sentiment signals have weak predictive power on their own. See [Backtesting Methodology](https://learn.tradelabsai.com/research/backtesting-methodology/).

## Limits

- **Survey samples** may not represent the whole market.
- **Data delays:** CFTC data is collected on Tuesdays and released on Fridays.
- **Structural changes:** options volume growth (including 0DTE) has changed put call ratio behaviour.
- **Extremes can get more extreme** before reversing.

## Frequently asked questions

### What is sentiment data?

Information that measures investor mood and positioning, such as surveys, futures positioning, options activity and social media tone.

### Why are sentiment indicators used as contrarian signals?

Because when sentiment is extremely one sided, most investors may already be positioned that way, leaving the market vulnerable to a reversal.

### What are examples of sentiment indicators?

The AAII survey, CFTC Commitments of Traders, put call ratio, VIX, short interest, fund flows and crypto funding rates.

Next, learn what counts as alternative data in [Alternative Data Explained](https://learn.tradelabsai.com/alternative-data/alternative-data-explained/).

## Continue learning

- Next lesson: [Alternative Data Explained](https://learn.tradelabsai.com/alternative-data/alternative-data-explained/)
- Previous lesson: [News Feeds](https://learn.tradelabsai.com/alternative-data/news-feeds/)
- Related: [News Feeds](https://learn.tradelabsai.com/alternative-data/news-feeds/): News feeds deliver headlines and stories to traders, often in machine readable form. Learn the main sources, latency, how algorithms parse news and the risks.
- Related: [Social and News Sentiment](https://learn.tradelabsai.com/alternative-data/social-and-news-sentiment/): Text analysis turns news and social media into sentiment signals. Learn how sentiment is measured, from word lists to language models, the evidence and the pitfalls.
- Related: [The VIX](https://learn.tradelabsai.com/volatility/the-vix/): The VIX measures expected 30 day volatility of the S&P 500 from option prices. Learn how it is calculated, what levels mean, VIX futures and how traders use it.
- Related: [Options Open Interest Analysis](https://learn.tradelabsai.com/options/options-open-interest-analysis/): Open interest counts option contracts still open. Learn how to read open interest with volume, the put call ratio, max pain and unusual activity, and their limits.
- Related: [Funding Rates](https://learn.tradelabsai.com/crypto/funding-rates/): Funding rates are periodic payments between longs and shorts on perpetual futures. Learn how they are calculated, what extreme funding means and how to use it.
- Related: [Consumer Confidence](https://learn.tradelabsai.com/macro/consumer-confidence/): Consumer confidence surveys measure how households feel about the economy. Learn the Conference Board and Michigan surveys, inflation expectations and market impact.