Silver Thursday

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DEFINITION of 'Silver Thursday'

A steep fall in the price of silver that occurred on Thursday March 27, 1980. The sharp drop, on Silver Thursday, was triggered by a failed attempt to corner the silver market and it led to massive panic in other commodities.

BREAKING DOWN 'Silver Thursday'

The attempt to corner the silver market was made by brothers Nelson Bunker Hunt and Herbert Hunt. The sharp sell-off occurred once the two men were unable to meet various margin calls that were caused by short-term weakness in the silver price. A group of U.S. banks needed to step in with a $1.1 billion line of credit, which helped bring stability back into the futures markets.

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RELATED FAQS
  1. What is Black Friday?

    Black Friday is a popular label attached to the Friday following Thanksgiving Day in the US. This day marks the beginning ... Read Full Answer >>
  2. How do futures contracts roll over?

    Traders roll over futures contracts to switch from the front month contract that is close to expiration to another contract ... Read Full Answer >>
  3. Why do companies enter into futures contracts?

    Different types of companies may enter into futures contracts for different purposes. The most common reason is to hedge ... Read Full Answer >>
  4. What does a futures contract cost?

    The value of a futures contract is derived from the cash value of the underlying asset. While a futures contract may have ... Read Full Answer >>
  5. Do negative externalities affect financial markets?

    In economics, a negative externality happens when a decision maker does not pay all the costs for his actions. Economists ... Read Full Answer >>
  6. What are the main risks associated with trading derivatives?

    The primary risks associated with trading derivatives are market, counterparty, liquidity and interconnection risks. Derivatives ... Read Full Answer >>

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