What Are Palladium Futures (PA)? Complete Contract Breakdown
Palladium futures (PA) are a thin, high-volatility metals contract on the CME, and if you don’t understand how this thing trades, you’ll bleed fast. This breakdown shows you the exact contract specs, the real liquidity profile, and why PA behaves nothing like GC or SI.
PA Contract Specs You Must Know Before Trading
The Palladium futures contract looks simple on paper, but the tick size and volatility make it dangerous if you size like a clown.
| Spec | Value |
|---|---|
| Exchange | CME (NYMEX) |
| Contract Size | 100 troy ounces |
| Tick Size | $0.50 |
| Tick Value | $50 per tick |
| Quote | USD per ounce |
| Settlement | Physical (avoid expiry) |
One tick is fifty bucks. A five-tick sweep is $250 instantly. You see moves like that all the time because PA depth is thin even during RTH.
Why Palladium Liquidity Is a Completely Different Beast
The order book is shallow, the spread widens for no reason, and large players push it around easily. This is the opposite of something like major FX futures with reliable depth. PA dances to its own rhythm.
- Low resting liquidity at each level
- Frequent 2–4 tick spreads
- Slippage on even modest market orders
- Fast spikes when one side clears out
Think of PA as the metal equivalent of trading 6Z — thin, snappy, and punishing if you get lazy with execution.
How PA Actually Moves During the Trading Day
Palladium doesn’t drift. It jumps. You’ll get a burst, a stall, another burst, then a random reversal that wipes out breakout traders.
Common intraday behaviors
- Sharp vertical moves from shallow depth
- Whipsaws around economic reports
- Spread widening during dead periods
- Sudden reversals when a single large order hits
If you try to “scalp one tick” like you do in GC, you’ll get slipped straight into donation mode.
Margin Requirements: The Part Retail Traders Ignore
PA has elevated margin because the swings are real. CME sets the baseline, but brokers tack extra on top. Understand these numbers before you size anything.
- Initial margin is significantly higher than GC
- Overnight margin jumps even more
- Intraday leverage is restricted by many brokers
This is not a contract you hold into news unless you enjoy pain.
PA Compared to Other Metals Contracts
PA may look similar to platinum or gold, but it trades nothing like them. The closest comparison is platinum, but even that contract has better depth. If you read my platinum overview, you’ll notice PA is the more explosive sibling.
| Contract | Tick Value | Liquidity | Behavior |
|---|---|---|---|
| GC | $10 | Deep | Smoother |
| SI | $25 | Moderate | Choppy |
| PL | $50 | Thin | Snappy |
| PA | $50 | Very Thin | Violent |
The takeaway: PA is the most unstable of the major metals contracts. You trade it for opportunity, not comfort.
Final Takeaways
Palladium futures (PA) reward precision and punish hesitation. The contract is thin, volatile, and unforgiving. If you want to trade PA correctly, respect the tick value, understand the depth, and size like you’re dealing with a weapon, not a toy. Get sloppy and PA will take your account faster than any major metal.