The Hunt Brothers and the Great Silver Corner of 1980

Nelson Bunker Hunt and William Herbert Hunt, heirs to one of the largest oil fortunes in Texas, began quietly accumulating silver in the early 1970s, partly as a hedge against inflation. Over the course of the decade, their buying — joined at points by wealthy partners in the Middle East — grew from a large position into something approaching an attempt to corner the global silver market.

By combining purchases of physical bullion with heavy positions in silver futures contracts, the Hunts and their partners were estimated to control a significant share of the world's deliverable silver supply. As their buying continued, silver prices rose from around two dollars an ounce in the early 1970s to nearly fifty dollars an ounce by January 1980.

The rally drew in the public too: ordinary households sold silverware and jewellery to cash in on the surge, temporarily boosting supply even as futures speculation kept pushing prices higher.

The unwind was triggered by exchange rule changes. Commodity exchanges, alarmed at the concentration of positions, raised margin requirements and imposed new limits restricting purchases made on borrowed money. Unable to maintain their leveraged positions, the Hunts faced enormous margin calls.

On March 27, 1980 — remembered as Silver Thursday — silver prices collapsed by around fifty percent in a single day. The Hunt brothers' paper losses ran into the billions, and the fallout threatened the solvency of several brokerage firms exposed to their positions, prompting a coordinated bank rescue loan to prevent broader financial contagion.

The episode became a textbook case study in commodity market regulation, prompting exchanges to tighten position limits and margin rules that remain influential in how futures markets are policed today.