Palladium COT — Week of October 17, 2026
Palladium CFTC COT Report: Week of October 17, 2026
Executive summary
The Commitments of Traders report for NYMEX Palladium (PA) for the week ending October 17, 2026, highlights an unprecedented build in speculative bearish positioning alongside an aggressive expansion in market participation:
- Record Managed Money Short Exposure: Managed Money gross short positions surged by 2,133 contracts week-over-week to reach 16,003 contracts—the highest level in the tracked series—accounting for 69.1% of total open interest.
- Deepening Speculative Net Short: Managed Money net positioning deteriorated to -10,699 contracts, driven by heavy gross short additions outstripping long additions (+819 contracts).
- Aggressive Capital Inflow on Price Breakdown: Open interest jumped by 2,113 contracts to 23,173, confirming that fresh short-selling capital entered the market as prices broke down sharply toward $1,088.00 per ounce.
- Commercial and Intermediary Absorption: Swap dealers and commercial producers absorbed the speculative selling, with Swap Dealers increasing gross longs to 8,351 contracts (+629) and Producer/Merchants expanding longs to 2,028 contracts (+583).
Positioning (net, extremes vs recent weeks)
Speculative exposure in Palladium has reached historical extremes within the dataset:
- Managed Money:
- Gross Longs: 5,304 contracts (22.9% of total open interest)
- Gross Shorts: 16,003 contracts (69.1% of total open interest)
- Net Position: -10,699 contracts
- Context: Speculators have shifted from a near-balanced stance in late 2025 (net +293 on December 23, 2025) to a persistent and accelerating net short posture throughout 2026. Gross short exposure has more than doubled from early 2026 levels (~6,600–7,500 contracts in January) to reach an extreme of 16,003 contracts.
- Swap Dealers:
- Gross Longs: 8,351 contracts (36.0% of OI)
- Gross Shorts: 2,174 contracts (9.4% of OI)
- Net Position: +6,177 contracts (multi-month high net long)
- Producer / Merchant / Processor / User:
- Gross Longs: 2,028 contracts (8.8% of OI)
- Gross Shorts: 1,110 contracts (4.8% of OI)
- Net Position: +918 contracts (reflecting a structural reduction in commercial forward hedging from net short levels of -4,544 contracts in late 2025)
- Other Reportables:
- Net Position: +2,621 contracts (3,481 longs vs. 860 shorts)
- Nonreportable (Small Traders):
- Net Position: +983 contracts (2,821 longs vs. 1,838 shorts)
Flows and week-over-week changes
The October 17 report marks the second consecutive week of massive volume and open interest expansion:
| Category | Long Change | Short Change | Spreading Change | Net Impact |
|---|---|---|---|---|
| Managed Money | +819 | +2,133 | -284 | -1,314 (Bearish) |
| Swap Dealers | +629 | +58 | +14 | +571 (Bullish) |
| Producer / Merchant | +583 | -153 | — | +736 (Bullish) |
| Other Reportables | +308 | +55 | +131 | +253 (Bullish) |
| Nonreportables | -87 | +159 | — | -246 (Bearish) |
| Total Open Interest | +2,113 | — | — | — |
Managed Money drove the expansion, adding 2,133 short contracts while trimming spreading exposure by 284 contracts to 793. Concurrently, commercials and swap intermediaries took the opposing side, collectively adding 1,212 long contracts.
Commercials vs speculators
A stark structural divergence characterizes the current market structure:
- Speculative Crowding: Managed Money accounts for nearly seven out of every ten short contracts (69.1%). With 46 distinct short managed money accounts active, the bearish positioning is broad-based across systematic and discretionary trend-followers.
- Commercial/Intermediary Accumulation: Commercial users and dealers have historically maintained net short positions to hedge physical inventories. In contrast, Producer/Merchants are net long by 918 contracts, having reduced gross shorts from 4,544 in December 2025 to 1,110 today. Swap dealers hold their largest net long book in recent history (+6,177 contracts), acting as the primary liquidity counterparty to trend-following funds.
Open interest and participation
- Aggregate Open Interest: Rose by 2,113 contracts (+10.0%) to 23,173 contracts, representing the highest open interest recorded across the historical lookback (surpassing the 22,061 peak on December 23, 2025, and well above the April 2026 trough of 14,648).
- Trader Participation: Total trader count expanded to 197 (from 183 on October 9 and 172 on October 2). Participation in Managed Money shorts stands at 46 entities, up from 15 in mid-February 2026.
- Concentration Metrics:
- Top 4 Traders: Account for 22.7% of gross longs and 27.2% of gross shorts (22.6% long and 26.4% short on a net basis).
- Top 8 Traders: Account for 34.4% of gross longs and 40.7% of gross shorts (34.2% long and 39.8% short on a net basis).
- Concentration remains moderately diversified across the short side compared to late 2025/early 2026, when the top 8 traders routinely accounted for 45%–50% of gross shorts, confirming widespread participation among funds rather than an isolated outlier position.
Price context
Front-contract PA prices exhibit a steep downward trend:
- Late Summer Peak: Palladium closed at $1,435.50 on August 28, 2026, followed by a secondary peak at $1,427.50 on September 3.
- September Slide: Prices steadily eroded through September, falling from $1,390.00 on September 4 to $1,305.00 on September 18 and closing at $1,209.00 on September 28.
- October Breakdown: Note: Daily quote data between September 28 and October 14 is sparse in the available series. By October 14, front-month palladium settled at $1,088.00—representing a decline of $347.50 (-24.2%) from the late-August highs.
- Price/Positioning Alignment: The sharp drop in price directly correlates with the relentless accumulation of speculative shorts. Between September 11 and October 17, Managed Money gross shorts surged from 9,178 to 16,003 contracts, accelerating the downward momentum into fresh multi-month price lows.
Risks and watchpoints
- Asymmetric Short-Squeeze Risk: With Managed Money gross shorts at 16,003 contracts (69.1% of total open interest) and open interest relatively small in absolute terms (23,173 contracts), any shift in macro sentiment or localized supply constraint could trigger severe forced short-covering.
- Trend-Following Momentum: While position crowding is extreme, the technical breakdown is unambiguous, and the expansion of open interest confirms active capital commitment behind the selloff rather than long liquidation.
- Counterparty Liquidity: Swap dealers are holding heavy gross long inventory (8,351 contracts). Any requirement by dealers to hedge or rebalance their books could lead to localized liquidity gaps in exchange-traded contracts.