When it comes to the craziest short squeezes in financial history, one cannot ignore the Silver Battle launched by the Hunt brothers in the 1980s. These two oil magnates once reported profits of billions of dollars, but under the dual blows of regulatory intervention and market reversal, they turned around and fell into a quagmire of approximately $1.7 billion in losses.

The most dangerous moment arrived, and the entire financial system was on edge. The Federal Reserve and banking consortium were forced to jointly provide a rescue loan of $1.1 billion, not out of goodwill, but to prevent a chain reaction of collapse. The collateral offered by the Hunt brothers? A large amount of oil assets. This high-stakes gamble ultimately ended in failure.

Legal sanctions followed. A civil judgment in 1988 ordered them to pay $134 million, and the same year they filed for bankruptcy. Soon after, in 1989, both were fined $10 million and received lifetime bans—never allowed to enter the commodity trading market again.

Interestingly, the story did not end with bankruptcy. Nelson Hunt had already regained some of his wealth by the time of his death in 2014, and William Hunt lived longer, accumulating up to $4.3 billion in assets through oil businesses before passing away in 2024. This shows that even when struck down by the system, having enough resources and patience can lead to a comeback.

But what is the most profound lesson from this case? The risks of high-leverage short squeezes are far greater than imagined—they can not only destroy personal wealth but also threaten the entire financial ecosystem. It also fundamentally changed the rules of the commodity futures market, prompting regulators to strengthen position limits and risk control measures afterward. For anyone engaged in leveraged trading, this serves as a mirror.