Can you lose more than the Initial Margin?

[TraderZones]

Quote from southbeach4me:

Most futures brokers do in fact have circuit breakers that will close your positions in the event that your taking a huge fast hit.

Except in catastrophic markets, as Oct 19, 1987 or the Great Depression, there is no one to take the other side of the trade, and neither stops, "limitup/down", nor brokers can do anything to get you out.

It is amazing how people do not grasp Black Monday, 1929. People were "jumping out of windows" and going under, because many could NOT get out. There were a lot more sellers than buyers at normal prices. Buyers were waiting until prices plummeted.

During the Asian currency crisis, Indonesia (I believe) had stock markets and currencies down 80/90% in short order.

Imagine someone reports that North Korea/Pakistan/India/Israel has detonated a nuclear weapon on a populated area, or terrorists killed millions with bioterror. Even if the reports were wrong.

Only the shorts will be making money.... The longs may be filing for bankruptcy.

That is the difference between real and paper leveraged trading. On paper, the trader starts over. In real trading, they are beyond wiped out.

 

[loufah]

Quote from increasenow:

.this is the ONLY trading vehicle where you can lose more than is in your account..

Being long options that are auto-exercised can blow you out, too. There's a thread here about someone who had long GOOG options in an IRA account at expiration that were slightly in the money. GOOG gapped down the following Monday and by the time he was auto-closed out he was at -$8K, which the broker auto-transferred from one of his other accounts.