The latest Commitment of Traders (CoT) report from the ICE platform reveals that, at the end of last Friday, investment funds expanded their net long positions to a massive 78 million allowances, after rising for the fifth consecutive week.

According to market data published this morning by ICE, speculative traders boosted their long positions by 7,33 million allowances, bringing the total to multi-year record high of  107,6 million allowances. 

Meanwhile, funds reduced their short positions by 1,8 million allowances, reaching just 29,6 million allowances, the lowest level since July 2023.

As usual, the sentiment reflected in ICE’s latest report was mirrored in trading activity, with EUAs finishing last Friday’s session 2.35% above the previous week’s close. However, the sharp increase in net long positions raises the question of if this momentum will fade following the compliance deadline.

Furthermore, the build-up of large long or short positions can amplify market volatility, as traders caught on the wrong side are forced to liquidate their holdings. This phenomenon, commonly referred to as a squeeze (a short squeeze when short sellers rush to cover, or a long squeeze when bullish positions are unwound), often accelerates price swings in the opposite direction and can lead to abrupt market corrections.