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Young folks: remember, you can always declare bk after a bad options investment. Unlike student loans.
Why should a bad options investment be better protected than studying?
Earlier quoted context omitted.
Why should a bad options investment be better protected than studying?
Because you need to qualify for margin and the person who lent you the money agreed to lend it to you knowing that you could BK it. With student loans, the student usually doesn't have an income or assets so there needs to be more incentives to convince lenders to lend money.
Fortunately, if you do a very bad investment, you can sell all your assets, go bankrupt, and keep your life. Too bad the poor guy chose to take his life. But this again looks like not doing enough homework.
This is very sad. I wish these things were written in large red letters on the signup page for a trading account, and one would have to type them in first person, like "I realize that I can lose all my possessions as a result of a bad trade" (no copy-paste allowed) to even accept the terms of service.
[Edited: spelling]
I'm aware options are complicated, but is someone able to expand on how this is possible? I guess if you short calls you have unlimited downside, no? but it was my understanding that the entire point of options was to cap downside (don't exercise) and maintain upside
It also appears RH users get margin accounts by default, at least from everything I've read. If that's true, it's probably the real problem.
In the EU retail traders are permitted access to margin, but brokers are required to eat any loss exceeding the value of the account. It's not enough, because it still means new "traders" are exposed to amplified volatility, thus ensuring their accounts will blow out much faster than they may have otherwise, and positions that might have recovered in a cash account get margin called and closed out at the worst possible moment.
Leverage/margin access should require similar levels of study as a private pilot's license
I don’t know much about Robin Hood but people here seem to be indicating that it’s not possible to end up owing money like that.
The tweets also seem to advertise for two other twitter accounts that give investing advice.