According to the latest Commitment of Traders (CoT) report published this morning by the ICE platform, investment funds increased their net long holdings to 90.8 million allowances, up from 85.7 million in the previous week, confirming speculative optimism.

Data show that, as of last Friday, speculative traders had increased their long-term positions by 6.6 million allowances, to an impressive total of 119.7 million allowances. Furthermore, funds expanded their short-term positions by almost 1.5 million allowances, reaching 28.8 million.

This represents the strongest net long positioning since spring 2021. BBVA analysts also noted that, since mid-August, funds have accelerated their accumulation of net length — rising from around 20 million to the current level, an increase of roughly 355%.

However, while investors remain “heavily committed,” according to analysts quoted by Carbon Pulse, EUA prices have not reacted proportionally to the rise in reported net longs, gaining only around 12.5% since the week ending August 15.

Such a massive accumulation of net long holdings could also heighten the risk of a sharp sell-off. Any change in macro sentiment, energy demand, or policy signals could trigger an abrupt reversal, a phenomenon commonly referred to as a “long squeeze.”