How the Hunt Brothers' Silver Squeeze Collapsed on 'Silver Thursday'

The Hunt brothers of Texas, Nelson Bunker Hunt, William Herbert Hunt, and Lamar Hunt, accumulated over 43 million ounces of physical silver by taking delivery on futures contracts, effectively cornering the market. The price rose from around $6 in January 1979 to a peak of $48.70 in January 1980.

The accumulation was not just about buying silver; it was also about limiting supply and creating artificial demand. Regulators noted that the metal was held in a way that prevented it from being redelivered back into the futures market, with large quantities moved to Swiss storage.

Exchanges responded slowly, but eventually set position limits, raised margin requirements, and introduced liquidation-only trading. The squeeze depended on continuous accumulation, which was capped by these new rules.

The collapse began when prices turned downward. Margin calls forced selling, driving the price lower. This created a feedback loop of falling prices, margin calls, and further selling.