Rookie Trader Racked Up $700K In Debt
- Thread starter ironchef
- Start date
@Actuarial_Fun How many tampons do we need to insert into you before you stop crying?
TBH, lately I've noticed quite a lot of women are much emotionally tougher than many men.
probably, he traded some else's money in his family , and made some big promise to that someone that he's not going to lose the money, but unfortunately, he couldn't delivery under pressure and responsibility, and probably, he couldn't see his ability for paying it back....
No, it was Robinhood glitch that showed negative balance after being assigned one leg of a spread.
This fact seems to be overlooked by posters here.. . What happened to the other leg of the spread? If the other leg was not closed risk management is disaster at robinhood.
Didn't this kid talk to someone at RH when he saw the negative balance. Did someone at RH give him incorrect information? It would not be surprising.
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RH doesn’t support shorting stocks, so when you end up being short through an option assignment, it usually shows negative balance, locks the account for a day, then sells or exercises the remaining leg the following night.
But I’m assuming the guy got terrified, traumatized and shocked after seeing the negative -$700K balance, and didn’t think straight. Happens to traders who blow their account, and I guess he assumed that’s what happened to him, and way beyond blowing his account. It was stupid and didn’t deserve to end in death, but unfortunately it did. If he just ended up in a hospital he could’ve been awarded Darwin Award. Unless, wait, is the Darwin Award meant for dead people?
But atleast he got an award, his parents will be proud.
This kid was mentally unbalanced which is obvious.
Like many retail traders he knew next to nothing about the product he was trading. In the money options, particularly deep in the money get exercised frequently.
RH is also likely at fault for failure to make disclosures.
RH will likely be fined by the SEC.
The negative balance, which was temporary in nature would likely would show up at most brokerage firms.
RH might have been negligent by not taking immediate action to liquidate or exercise the other leg.
RH could have called the customer to inform him of the negative balance and the action that the firm was going to take.
There is more to this story. What role did Sullimar Capital, a family hedge fund, play in this fiasco.https://www.marketwatch.com/story/f...rader-who-racked-up-700000-in-debt-2020-06-14
Like many retail traders he knew next to nothing about the product he was trading. In the money options, particularly deep in the money get exercised frequently.
RH is also likely at fault for failure to make disclosures.
RH will likely be fined by the SEC.
The negative balance, which was temporary in nature would likely would show up at most brokerage firms.
RH might have been negligent by not taking immediate action to liquidate or exercise the other leg.
RH could have called the customer to inform him of the negative balance and the action that the firm was going to take.
There is more to this story. What role did Sullimar Capital, a family hedge fund, play in this fiasco.https://www.marketwatch.com/story/f...rader-who-racked-up-700000-in-debt-2020-06-14
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This is nonsense about retail a driving factor and forcing Wall Street to chase the market after them.