Palladium COT Report: Week Ended October 9, 2026

Executive summary

The Commitments of Traders report for NYMEX Palladium (PA) as of October 9, 2026, reveals an aggressive build in speculative short positioning alongside an expansion in open interest. Managed money traders extended their net short stance to -9,385 contracts, marking an extreme net bearish configuration across the multi-month lookback period. Total open interest surged by 2,458 contracts to 21,060, driven overwhelmingly by 2,168 fresh managed money short additions. Concurrently, swap dealers and producers/merchants absorbed these flows by adding to net long positions. Speculative short exposure now represents nearly two-thirds (65.9%) of total market open interest, pointing to a heavily crowded short trade vulnerable to sharp short-covering shocks.

Positioning (net, extremes vs recent weeks)

Positioning across key trader categories shows distinct divergence:

• Managed Money: Managed money holds 4,485 long contracts and 13,870 short contracts (along with 1,077 spreading), resulting in a net position of -9,385 contracts.
  • Managed money shorts now account for 65.9% of aggregate open interest, reaching a clear peak for the period analyzed (up from 62.9% on October 2, 2026, and far above the ~30%–35% range observed in early 2026).
  • The net managed money stance is at its most negative level in the dataset, significantly deeper than the -7,962 net contracts reported on October 2, 2026, and -6,006 contracts on September 25, 2026.
• Swap Dealers: Swap dealers hold 7,722 longs against 2,116 shorts (plus 29 spreading), yielding a net long position of +5,606 contracts. Gross swap dealer longs account for 36.7% of open interest, near the upper end of historical percentages over recent months.
• Producer/Merchant/Processor/User: Commercial physical participants hold 1,445 longs against 1,263 shorts, standing at a net long stance of +182 contracts. This continues the commercial shift toward a small net long position seen over recent weeks, departing from their substantial net short exposure earlier in the year (e.g., -3,921 contracts on December 23, 2025).
• Other Reportables & Nonreportables: Other reportables stand net long by +2,368 contracts (3,173 longs vs. 805 shorts). Nonreportables (small traders) are net long by +1,229 contracts (2,908 longs vs. 1,679 shorts).

Flows and week-over-week changes

The reporting week ended October 9, 2026, saw heavy positioning flows:

• Managed Money: Added 745 gross longs and 2,168 gross shorts, alongside an increase of 226 spreading contracts. The net shift of -1,423 contracts pushed net speculative positioning deeper into net short territory.
• Swap Dealers: Increased gross longs by 668 contracts while covering 144 short contracts (spreading declined by 56 contracts), generating a net weekly long inflow of +812 contracts.
• Producers/Merchants: Added 201 longs while covering 78 shorts, improving their net stance by +279 contracts.
• Other Reportables: Added 515 longs and 284 shorts (spreading rose by 11), a net expansion of +231 contracts.
• Nonreportables: Shifted net long by +101 contracts (+148 longs vs. +47 shorts).

Commercials vs speculators

A structural divergence between commercial balance-sheet providers and trend-following speculators is dominating Palladium:

• Managed money speculative short interest has expanded rapidly over the past month, rising from 9,961 shorts on September 18, 2026, to 11,702 on October 2, and now reaching 13,870 contracts.
• In contrast, commercial hedgers and swap dealers are providing the liquidity to absorb these speculative sales. Combined swap dealer and producer/merchant net length is now +5,788 contracts (+5,606 for swap dealers and +182 for producers/merchants).
• The willingness of producers/merchants to trim gross short exposure (from 4,544 contracts in late 2025 to just 1,263 contracts currently) confirms a marked reduction in forward producer selling at current price levels.

Open interest and participation

• Open Interest: Total open interest jumped by 2,458 contracts (+13.2%) to 21,060 contracts, recovering to levels last seen in December 2025 (22,061 contracts).
• Trader Breadth: Total reporting traders climbed to 183, up from 172 on October 2, 2026, and 152 on September 25, 2026.
  • Managed money short trader count grew to 46 (from 40 the prior week and 23 in late 2025), showing broadening institutional participation on the short side.
  • Managed money long trader count remained relatively steady at 32 (vs. 33 the prior week).
• Concentration: The 4 largest traders hold 24.4% of gross longs and 27.1% of gross shorts. The 8 largest traders account for 35.8% of gross longs and 41.5% of gross shorts. Net 8-trader short concentration sits at 40.2%, indicating that while shorts are concentrated, the recent addition of 23 managed money short traders since late 2025 shows short positioning is also distributed across a broader cohort of funds.

Price context (only using provided series)

Note: Daily price series data ends on September 28, 2026; daily quote series between September 29 and the October 9, 2026 as-of date were not provided.

The available daily price history illustrates a steep price contraction heading into the current COT window: - PA traded at a high of $1,435.5/oz on August 28, 2026, before embarking on a downward trend through September. - The contract closed at $1,390.0/oz on September 4, $1,319.0/oz on September 11, $1,305.0/oz on September 18, and $1,266.0/oz on September 25. - On September 28, 2026 (the final quote available in the series), front-month palladium settled at $1,209.0/oz, a drop of over $226/oz from the late-August highs. - The subsequent surge in open interest (+1,872 contracts on October 2 and +2,458 contracts on October 9) coupled with managed money gross short expansion indicates that speculators aggressively pressed short positions during and immediately following this late-September selloff.

Risks and watchpoints

• Extreme Short Squeeze Vulnerability: With managed money gross shorts at 13,870 contracts (65.9% of open interest) and 46 distinct funds holding short positions, any catalyst that sparks buying could trigger an abrupt short squeeze in an illiquid market.
• Trend-Following Capitulation: The net managed money position (-9,385 contracts) is at an extreme. If front-month Palladium prices stabilize above late-September lows, forced short-covering could cascade rapidly.
• Commercial Producer Inaction: Producers hold minimal gross short positions (1,263 contracts, representing only 6.0% of open interest). The absence of heavy producer forward hedging overhead implies that upside moves may encounter limited commercial resistance until prices recover substantially.