20-Year-Old Robinhood Customer Commits Suicide After Seeing A $730,000 Negative Balance

[Gaslight Capital]

I figured this would've been something he'd have seen happen in similar trades? Who, knows maybe dude went full r-tard on this 1st attempt; he's 20 after all.

This may have been his first foray into trading credit spreads. The article said he only started trading in March. He probably did well buying calls, and then "did additional research" and found someone on youtube or stocktwits or wherever saying he could make an easy weekly paycheck selling bull credit spreads because the market only goes up. I think Robinhood showed the debit for the cash to purchase the shares without showing the shares. His suicide noted indicated that he understood the actual risk involved and was therefore angry and at a loss to explain how it appeared he had lost so much more than the few hundred he thought he had at risk.

I'm not assigning RH any culpability at this point, but I am not going to blame the kid either. But if I do understand the situation correctly, RH wouldn't want me on the jury.

 

[Pekelo]

If he were short three put credit spreads 1 strike wide on AMZN his max exposure was very small. He did not understand what he was seeing, panicked, and killed himself. Reading the article closely indicates to me that the problem was not leverage.

Correct. RH users say that the account balance can be out of touch for a day because the broker handles spreads incorrectly.

 

[Pekelo]

But if I do understand the situation correctly, RH wouldn't want me on the jury.

Yeah, they should be sued into oblivion.

 

[newwurldmn]

He should have called customer service to understand what was going on in his account.

 

[zdreg]

No, it doesn’t seem he used leverage. Did you read the article?

If he had used leverage he might not felt the need to commit suicide. If it was his own money he should have had the confidence to bounce back as youth was on his side.

 

[maxinger]

sigh .... what a waste.
what careless man.
in time of disaster, ability to neutralise negative emotion is extremely important.

this 20 y/o university student traded put vertical spread.
it is relatively low risk compare with say selling naked options.
when he saw huge loss in his account, he should have
known that was impossible, and he should have checked what happened.

ha!!! I sold naked option when I was a newbie trader.
loss is really infinity / unlimited.
luckily I didn't lost my life.

 

[SanMiguel]

Err, why wouldn't they just liquidate the trade when margin was exceeded?!

 

[newwurldmn]

sigh .... what a waste.
what careless man.
in time of disaster, ability to neutralise negative emotion is extremely important.

this 20 y/o university student traded put vertical spread.
it is relatively low risk compare with say selling naked options.
when he saw huge loss in his account, he should have
known that was impossible, and he should have checked what happened.

ha!!! I sold naked option when I was a newbie trader.
loss is really infinity / unlimited.
luckily I didn't lost my life.

It’s can be more risk if you scale it up, which he obviously did.

Bottom line:
guy didn’t know what he was doing. Robinhood enabled him.
Robinhood infrastructure sucks.

 

[ElCubano]

He should have called customer service to understand what was going on in his account.

Exactly.

 

[maxinger]

It’s can be more risk if you scale it up, which he obviously did.

Bottom line:
guy didn’t know what he was doing. Robinhood enabled him.
Robinhood infrastructure sucks.

right.

I am sure there are other brokers with poor security / safety feature.
something must be done to eliminate such brokers.