Summary
A billionaire Chinese trader who has benefited from earlier bullish bets on gold has taken a substantial short position in silver on the Shanghai Futures Exchange. The short position, established via brokerage Zhongcai Futures Co., stands at roughly 450 tons - about 30,000 contracts - and had produced an estimated paper gain of about 2 billion yuan ($288 million) after silver's recent decline. Including prior losses from earlier liquidations, the trader's net prospective profit was reported as around 1 billion yuan based on prices at Tuesday's close. Silver's continued slide, including a drop of more than 16% on Thursday, likely increased those profits.
Position background and scale
The trader, described as low profile and residing primarily in Gibraltar, amassed nearly $3 billion from bullish positions on Shanghai Futures Exchange gold contracts since early 2022, according to Bloomberg. More recently, he began building a large net short in silver during the final week of January through his brokerage Zhongcai Futures Co. Exchange rules do not identify individual investors behind brokerage accounts; however, Bloomberg reported that the trader's personal investments and products he manages for a small client group make up most of Zhongcai's precious metals positions.
Financial outcomes and volatility
The short position equates to about 450 tons or 30,000 contracts. Following a sharp decline in silver since the prior week, that position produced a paper gain of roughly 2 billion yuan, or about $288 million. The trader has faced market risk: some positions were liquidated at a loss amid silver volatility. Accounting for those earlier losses, his position and Tuesday's closing prices implied a net profit of about 1 billion yuan.
Silver's slide continued on Thursday, falling more than 16% on the day - a move that the reports say likely enlarged the trader's gains.
Key points
- The short position is the largest net short in silver on the Shanghai Futures Exchange and was built through Zhongcai Futures Co.
- The position represents about 450 tons or 30,000 contracts and showed a paper gain of roughly 2 billion yuan after recent price drops.
- The trader previously accumulated nearly $3 billion from bullish Shanghai gold positions since early 2022.
Risks and uncertainties
- Market volatility forced the trader to liquidate some positions at a loss, demonstrating liquidity and execution risk in futures trading.
- Exchange reporting does not identify individual account holders, so attribution of positions to the trader relies on reporting about Zhongcai's client and product mix.
- Further price moves in either direction could materially change the position's profit or loss profile from the levels reported as of Tuesday and following Thursday's slide.
This report reflects the positions and market movements as presented in the available disclosures and reporting.