LOF hits the limit up again during trading! Silver arbitrage is "trending," with alerts for "erroneous orders" and "abnormal trading" issued!

The epic short squeeze in silver prices is triggering a liquidity chaos and speculative frenzy across markets. As the only silver futures fund in the entire market, Guotou Silver LOF has encountered capital "hunting" in the secondary market, hitting the daily limit for several consecutive trading days, with the premium rate once exceeding 68%, forcing the fund manager to issue frequent risk warnings and adjust the subscription limit.

According to the latest market data, on December 24th, Guotou Silver LOF quickly surged to the daily limit after resuming trading, with an intraday turnover rate exceeding 6% and the premium rate climbing to a historical high of 68.16%.

The extremely euphoric market sentiment even triggered a "fat finger" incident, where Guotou Ruiying LOF, due to a mismatch of funds, inexplicably hit the daily limit because of its similar code and name. This irrational rise, detached from the net value, has made the topic of "silver arbitrage" rapidly popular on social networks, with many retail investors attempting to profit from the price differences both inside and outside the market.

In response to this abnormal phenomenon, the fund company has implemented emergency interventions. Guotou Silver LOF has issued 13 premium risk warnings since December 2nd and announced an adjustment of the subscription limit to 500 yuan, attempting to stabilize the premium by increasing supply while warning that high premiums are not sustainable. Market analysts point out that the current secondary market prices have formed a "scarcity bubble," and investors face not only significant price correction risks but also liquidity traps under the arbitrage mechanism.

The macro backdrop of this chaos is the skyrocketing silver prices. Driven by expectations of interest rate cuts from the Federal Reserve and supply-demand imbalances, London silver has risen over 150% this year, while COMEX silver has increased over 130%, far exceeding the performance of gold during the same period. The extreme one-sided market, combined with the fund's special valuation mechanism and T+2 trading rules, is pushing this niche investment product into the eye of the risk storm.

Surge in Premium Rate and "Fat Finger" Market

On the afternoon of the 24th, Guotou Silver LOF announced that the closing price in the secondary market was 3.116 yuan, significantly higher than the net asset value of the fund shares. Investors who blindly invest in high premium rate fund shares may face substantial losses. This fund will suspend trading from 10:30 on December 25, 2025, and will resume trading at 10:30 on the same day. Currently, the subscription limit for Class A fund shares of this fund is 500.00 yuan. Subsequently, the fund manager will adjust the subscription limit for Class A fund shares, and the high premium rate of the fund's secondary market price is not sustainable, please pay special attention.

Hua Tian Fu Gold LOF also announced that recently, the trading price of Class A shares of the Hua Tian Fu Gold and Precious Metals Securities Investment Fund (LOF) managed by Hua Tian Fu Fund Management Co., Ltd. has been significantly higher than the net asset value of the fund shares, resulting in a large premium. To protect the interests of investors, the Class A shares of this fund will suspend trading from 10:30 on December 25, 2025, and will resume trading at 10:30 on the same day. **

The pursuit of exposure to silver by funds has evolved into an irrational game of trading instruments. Data shows that the Guotou Silver LOF hit the daily limit on December 22 and 23, with the on-market price reaching a premium of 57.5% over net value by the close on the 23rd. After being suspended for an hour at the opening on the 24th, buying pressure surged again, pushing it to the daily limit with a transaction volume of nearly 500 million yuan, and the premium rate further expanded to over 68%.

This frenzy has led to a distortion of the market pricing mechanism, even resulting in a "black swan" event of capital mismatch. Due to the similarity in codes and abbreviations, Guotou Ruiying LOF was mistakenly identified as a silver concept stock and was subject to speculative trading, soaring to the daily limit on December 24, following significant gains in the previous two trading days.

Industry insiders point out that this reflects the current bullish sentiment reaching an extreme, with funds blindly searching for targets in a narrow secondary market, causing trading prices to seriously deviate from the fundamentals of the fund.

Nationwide Arbitrage: High Risks Behind the Arithmetic

The high premium rate has led to a flood of "arbitrage tutorials" on social media. The logic seems simple: investors purchase fund shares at net value off-market and then sell them on-market at a high premium, theoretically earning a price difference of up to 30%. According to Wind data, the fund's circulating shares surged nearly 25% within three months, with over 10 million new shares added on December 19 alone.

A netizen recently posted that they made a profit of 30 yuan through arbitrage that day and expressed a desire to continue.

However, according to the 21st Century Business Herald, the actual operational difficulty is far greater than theoretical calculations. Arbitrage trading involves cross-system transfer custody, which typically requires T+2 days to complete the sale. During this period, if the silver price retraces or the premium rate narrows, the arbitrage space will be quickly compressed or even turn into a loss. As the purchase limit is raised from 100 yuan to 500 yuan, selling pressure may significantly increase in the coming trading days, leading to severe fluctuations in secondary market prices, and late-arriving arbitrage funds are at high risk of a stampede.

Institutions "Emergency Brake" and Valuation Dilemma

In the face of uncontrolled premiums, fund managers have taken "emergency brake" measures. In addition to frequently issuing risk warnings, the fund has been adjusting the purchase limits. Although raising the upper limit from 100 yuan to 500 yuan seems to be a relaxation, it is actually aimed at introducing more selling pressure to stabilize the irrational premium in the market.

Moreover, the fund's special valuation mechanism has also exacerbated tracking errors. Guotou Silver LOF mainly holds silver futures main contracts and uses settlement prices for valuation. When silver prices rise unilaterally, there is a discrepancy between the settlement price of the futures contract and the closing price, compounded by frequent rolling and monthly losses and the impact of subscription and redemption funds, leading to the fund's net value performance often lagging behind the underlying index Data shows that in the past year, the main contract yield of silver futures on the Shanghai Futures Exchange has doubled, while the yield of the fund is only 88.57%, which makes the surge in on-site prices even more lacking in fundamental support.

Industry experts generally believe that the current market of the Guotou Silver LOF is a typical price distortion under the resonance of various factors. Tian Lihui, a finance professor at Nankai University, stated that the high premium stems from a severe supply-demand imbalance, with funds "hunting" in a small pool, creating a "scarcity bubble."

For ordinary investors, participating in such speculation is akin to picking up chestnuts from the fire. Silver itself has both industrial and speculative attributes, with volatility significantly higher than that of gold. Once market sentiment crosses a critical point, liquidity exhaustion will turn potential profit opportunities into deep losses in an instant. Market participants suggest that investors should stay away from speculative symbols that are detached from fundamentals and focus on assets with better liquidity and purer attributes or other channels with controllable risks