Analysis of High-Premium Arbitrage Sustainability in Guotou Silver LOF (161226)

Based on the latest market data and analysis, I will provide an in-depth analysis of the sustainability of high-premium arbitrage for Guotou Silver LOF (161226).

Guotou Silver LOF is currently the

, and this absolute scarcity makes it the only choice for ordinary investors to access the silver market through this channel [1]. Against the backdrop of a surge in silver prices in 2025 (a year-to-date increase of nearly 150%), funds flooded into this sole channel, leading to a severe imbalance between supply and demand.

: Off-exchange subscription (at net value) → Share confirmation on T+1 → Transfer to on-exchange for sale (at market price) on T+2 [2]. Theoretically, one can earn the spread after deducting fees from the premium.

: Silver futures have (21:00 - 2:30 next day), while the LOF net value only reflects the closing price of the day session, leading to overnight net value differences. When silver rises sharply in the night session, the LOF net value will jump the next day, but the on-exchange price has already reflected this in advance, causing the premium rate to passively narrow or even reverse.

• Subscription Limit Restriction
  : The daily subscription limit for Class A shares is only 100 yuan (recently relaxed to 500 yuan) [3]
• Actual Return Calculation
  : When the premium rate was 68% on December 24, the theoretical return for a 500-yuan subscription was approximately 340 yuan; but after the limit-down on December 25, the theoretical return dropped to 225 yuan
• Influx of A Large Number of Arbitrageurs
  : From December 23 to 26, the cumulative net inflow was 445 million shares, with at least 400,000 accounts participating in arbitrage daily [2]

Based on online search and market data [1][2][3]:

• End of November
  : Premium rate 6.75%
• December 22-24
  : Three consecutive limit-up days, premium rate soared to a historical peak of
  68.19%
• December 25-26
  : Two consecutive limit-down days, premium rate plummeted to
  less than 30%
• December 29
  : Premium rate further dropped to
  23.22%

In just one week, the premium rate fell from 68% to 23%, a compression rate of

, verifying the judgment that high premiums are unsustainable.

:

• A large amount of arbitrage funds arrive on T+2, forming selling pressure
• On December 26, the on-exchange turnover was 597 million yuan, with a daily net inflow of 98 million shares [2]
• Continuous limit-downs caused some arbitrage funds to
  be unable to sell
  , falling into a liquidity trap

:

• Theoretical returns for early arbitrageurs: 300-350 yuan
• As the premium rate narrowed, later arbitrage returns dropped to
  around 150 yuan
  [3]
• Considering time cost and risk, the so-called “risk-free high returns” are actually very meager

:

• Increased from 100 yuan to 500 yuan; although still limited, the total amount of arbitrage funds
  increased by 5 times
• On-exchange shares increased from 10.97 million to 162.43 million (a growth of over 10 times) [mentioned in original text]
• Expansion of the circulating disk reduces the difficulty of market speculation and increases supply elasticity

:

High premium → Attracts arbitrageurs → Concentrated selling on T+2 → Premium compression → Arbitrage returns decrease → Arbitrage enthusiasm fades

[1][3]:

• A total of
  14-16 risk warning announcements
  have been issued since December
• Multiple intraday temporary suspensions (usually 1 hour)
• Continuous adjustment of subscription limit policies
• Regulators strictly identify abnormal trading behaviors

: The fund company repeatedly emphasized in the announcement that

:

• An “erroneous trade” incident occurred: Guotou Ruiying LOF (similar code) was mistakenly speculated to limit-up [1]
• “Arbitrage tutorials” flooded social platforms, with a large number of retail investors following suit
• On December 24, the daily turnover rate exceeded 6%, with extremely active trading

:

• Two consecutive limit-downs on December 25-26, marking the
  end of irrational speculation
• Shift from “national arbitrage” to “panic escape”
• The market began to refocus on the core anchor of fund net value

:

• Silver prices rose by more than 150% in 2025, already at a historical high
• COMEX silver futures and London Silver both experienced extreme short-squeezing行情
• Once silver prices correct, the LOF net value will fall, and the on-exchange price will face a
  “double kill”
  (premium compression + asset decline)

: Many LOFs with large premiums in the past eventually ended with [3]
Such corrections are sudden and severe, making it difficult to accurately predict the timing and magnitude

:

• Continuous inflow of arbitrage funds, increasing supply
• Fund companies continue to adjust subscription policies (may further relax)
• Regulatory pressure increases, stricter monitoring of abnormal transactions

: Considering the scarcity and transaction costs of silver LOF, the reasonable premium rate should be controlled within . Currently, the 23% premium rate still has .

When the premium rate returns to the reasonable range of 5-10%:

• After deducting subscription fees (1.5%), transaction commissions (0.03%), and transfer costs, there is little arbitrage space left
• Considering the price volatility risk of T+2, arbitrage is no longer attractive

Once the premium rate returns to normal:

• LOF prices will mainly fluctuate with silver futures prices
• Scarcity premium may remain at a low level (3-5%)
• Investors need to pay more attention to fundamental factors such as silver’s own supply and demand relationship, US dollar trend, and Federal Reserve policies

1. Take Profits Timely
   : The premium rate has dropped from 68% to 23%, so taking profits is a rational choice
2. Avoid Adding Positions
   : Do not continue to increase arbitrage positions just because “there is still a premium”
3. Beware of Liquidity Traps
   : Continuous limit-downs may lead to inability to sell

1. Arbitrage Window Is Closing Rapidly
   : The compression from 68% to 23% proves the trend
2. Worsening Risk-Reward Ratio
   : Potential return of 150 yuan vs potential loss of hundreds of yuan
3. Consideration of Time Cost
   : Opportunity cost during the T+2 lock-up period

1. Beware of Premium Regression Risk
   : Even if silver prices do not fall, premium compression will lead to losses
2. Focus on Fund Net Value
   : On-exchange prices will eventually return to net value; high premiums are unsustainable
3. Consider Stop Loss or Reduce Positions
   : Protect principal before the premium rate further regresses

1. Premium Rate Has Been Significantly Compressed
   : From a peak of 68% to 23%, a compression of 66%, verifying the regression trend
2. Stampede Effect of Arbitrage Funds Appears
   : Influx of 445 million shares of arbitrage funds forms continuous selling pressure
3. Strong Intervention by Regulators and Fund Companies
   : 14 risk warnings, intraday suspensions, relaxed subscriptions
4. Obvious Signs of Irrational Speculation
   : Erroneous trades, national tutorials, herd effect
5. Historical Laws Indicate
   : Past high-premium LOFs all ended with rapid corrections

• Short-term Volatility Risk
  : Volatility may occur during the regression process
• Silver Price Risk
  : If silver prices plummet, LOF will face a double kill of net value and premium
• Liquidity Risk
  : In extreme cases, continuous limit-downs may lead to inability to sell

: With the reduction of subscription thresholds (100 yuan → 500 yuan), the increase of arbitrageurs (400,000 accounts daily), intensified regulatory intervention, and reversal of market sentiment, the original ultra-high premium space of Guotou Silver LOF , the arbitrage window , and sustainability is . Investors should be highly vigilant of the risk of premium regression and avoid becoming the last to take over.

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[1] Jinling API Data
[2] Sina Finance - “Guotou Silver LOF Premium Rate Exceeds 61%! Someone Earned 350 Yuan in Two Days with 500 Yuan Arbitrage” (https://finance.sina.com.cn/roll/2025-12-24/doc-inhcxqhx5530853.shtml)
[3] Securities Times - “Arbitrage Funds Flee En Masse; Silver LOF Limits Down and Premium Plummets” (https://www.stcn.com/article/detail/3558961.html)
[4] 21 Finance - “Roller Coaster Market! Guotou Silver LOF Rebounds Quickly After Limit Down, Premium Rate Exceeds 30% Again” (https://www.21jingji.com/article/20251229/herald/71bc31c339e2508622affe86cd63b478.html)
[5] Sina Finance - “LOF Limits Up Again Intraday! Silver Arbitrage ‘Floods Screens’, ‘Erroneous Trades’ and ‘Abnormal Transaction’ Warnings Arrive!” (https://finance.sina.com.cn/roll/2025-12-24/doc-inhcxcti4367455.shtml)
[6] Yicai - “From Carnival to Sudden Brake: Multiple LOF Products Stage ‘Limit Up and Limit Down in One Day’” (https://www.yicai.com/news/102975103.html)