Blow up account by margin call, not just losing account money..read this

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increasenow

has anyone actually lost more than their account value due to margin call beyond what your funds were in your account?...there is a lot of talk on ET about blowing your account...meaning loasing all your money in your account...BUT...what about beyond the $$$ you had in your account as you never closed a position...example:
$5,000 in your account...you trade 10 contracts of ES at $300 daytrade margin and the trade goes totally against you and you position is now -$9,750.00 example etc. as you had no stop or automatic default loss set...has this happened to anyone or has it happened to you...?
 
uh yeah..
it's called a debit..
and you owe it..
or you can move to another country and make your broker foot the bill...
though that type of behavior tends to be frowned upon.
 
Quote from increasenow:

has anyone actually lost more than their account value due to margin call beyond what your funds were in your account?...there is a lot of talk on ET about blowing your account...meaning loasing all your money in your account...BUT...what about beyond the $$$ you had in your account as you never closed a position...example:
$5,000 in your account...you trade 10 contracts of ES at $300 daytrade margin and the trade goes totally against you and you position is now -$9,750.00 example etc. as you had no stop or automatic default loss set...has this happened to anyone or has it happened to you...?
More...

Overleveraged.
 
Quote from increasenow:

has anyone actually lost more than their account value due to margin call beyond what your funds were in your account?...there is a lot of talk on ET about blowing your account...meaning loasing all your money in your account...BUT...what about beyond the $$$ you had in your account as you never closed a position...example:
$5,000 in your account...you trade 10 contracts of ES at $300 daytrade margin and the trade goes totally against you and you position is now -$9,750.00 example etc. as you had no stop or automatic default loss set...has this happened to anyone or has it happened to you...?
More...



Did this happen to you or is this hypothetical?

If it did happen why were you trading 10 contracts on $5000?
 
i was in some bad options that i got out of for a 30 k loss one time they would have ended up being a million dollar margin call that i would have owed though. so be very careful
 
Quote from increasenow:

has anyone actually lost more than their account value due to margin call beyond what your funds were in your account?...there is a lot of talk on ET about blowing your account...meaning loasing all your money in your account...BUT...what about beyond the $$$ you had in your account as you never closed a position...example:
$5,000 in your account...you trade 10 contracts of ES at $300 daytrade margin and the trade goes totally against you and you position is now -$9,750.00 example etc. as you had no stop or automatic default loss set...has this happened to anyone or has it happened to you...?
More...


A good broker will not allow this to happen (electronically that is), he or the "trading software" will automatically kick you out at a certain level way before you hit zero. Granted there might be situations where it can happen (NEWS), but other than that...your broker never wants to be in that situation as it might come out from him...trust me
 
Quote from wavefinder:

Did this happen to you or is this hypothetical?

If it did happen why were you trading 10 contracts on $5000?
More...
no, totally hypothetical...but,this is the difference between say options and futures...options you just lose what you paid for it but futures could be unlimited!
 
Quote from increasenow:

no, totally hypothetical...but,this is the difference between say options and futures...options you just lose what you paid for it but futures could be unlimited!
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Only if you are buying options. If you are writing (selling) naked puts and calls your losses are theoretically "unlimited".
 
Quote from fluttrader:

Someone working at a future brokerage told me that debit situation DO happen, the name of that brokerage starts with an A
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They definitely do happen, especially with brokers who have poor risk management. This was part of the undoing of Refco. I am very wary of brokers charging very low margins for this reason.
 
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