In the late 1970s, high U.S. inflation and worries about paper currencies pushed many investors toward hard assets like gold and silver. This environment made the silver market especially sensitive to large, leveraged bets (positions financed partly with borrowed money).
By 1979, Nelson Bunker Hunt and William Herbert Hunt (with partners) were building very large holdings in physical silver and silver futures. Their buying contributed to tight supplies and rising prices, drawing increasing attention from exchanges and regulators.
As price swings intensified in late 1979, the Chicago Board of Trade (CBOT) introduced position limits (caps on how large one trader’s futures position can be) and raised margin requirements (cash deposits required to hold futures). These steps aimed to reduce the risk that one group could dominate available supply.
On January 7, 1980, COMEX instituted position limits of 10 million ounces (2,000 contracts) per trader, with contracts above that amount required to be liquidated by February 18. The rule was meant to address market congestion and the risk of manipulation or a "corner" (controlling supply to force prices).
In mid-January 1980, silver prices surged to around $50 per ounce, reflecting intense demand and leveraged speculation. The spike increased the size of potential losses if prices reversed, because many positions depended on borrowed funds and had to meet daily margin requirements.
On January 21, 1980, COMEX suspended trading briefly and then imposed “liquidation only” rules, meaning traders could generally reduce positions but not add new long positions. This policy shift cut off new speculative buying and accelerated the move from a rising market to a forced sell-down.
After the January restrictions, silver prices began to decline. As prices fell, margin calls (demands for additional cash to keep futures positions open) increased pressure on heavily leveraged traders, including the Hunt group and their brokers.
On March 26, 1980, news reports described an effort tied to the Hunt group and partners to issue bonds backed by large silver holdings. The announcement did not restore confidence; instead, it highlighted the group’s need for financing as prices slid and obligations came due.
On March 27, 1980—known as “Silver Thursday”—silver prices plunged sharply in a single day as liquidation and panic selling intensified. The crash followed the earlier exchange restrictions and the inability of key players to keep funding large positions under rising margin demands.
The crisis became a widely cited example of how concentrated positions and leverage can destabilize commodity markets. In its later rulemaking discussions, the CFTC summarized the 1979–1980 episode as a case where exchanges used position limits, higher margins, and liquidation-only rules to address market imbalance and manipulation risk.
The legal fallout continued for years. In 1988, a federal jury ordered the Hunts and others to pay about $130 million to a commodities company owned by the government of Peru in a case tied to silver market manipulation claims.
In 1989, the Hunt brothers reached civil settlements with the Commodity Futures Trading Commission (CFTC). Nelson Bunker Hunt and William Herbert Hunt each agreed to pay a $10 million fine and accept bans from trading in commodity markets, marking a formal regulatory endpoint to the episode.
Hunt Brothers' Silver Market Corner Attempt (1979–1980)