He didnt actually lose 700k it was a UI problem.
Robinhood 20yo trader with no income loses 700k on options, takes life
181–190 of 217 posts
Re: Robinhood 20yo trader with no income loses 700k on options, takes life
#182He didnt actually lose 700k it was a UI problem.
Re: Robinhood 20yo trader with no income loses 700k on options, takes life
#183He didnt actually lose 700k it was a UI problem.
Re: Robinhood 20yo trader with no income loses 700k on options, takes life
#184He didnt actually lose 700k it was a UI problem.
Re: Robinhood 20yo trader with no income loses 700k on options, takes life
#185Earlier quoted context omitted.
There is not an equal probability of a day trader making 700k and losing 700k trading options. Market makers won’t demonize day trading—the “new blood” are their best marks.
The efficient market hypothesis says otherwise. If it was easier to lose money (ignoring trading costs and spreads) than it was to make money, I could easily beat the market by doing the opposite of the average joe loser.
You can easily beat the market using the wheel at a minimum but the time investment/return aren't ideal.
There are posts below that will decry listen to Buffet and others however their accounts are so large listening to them is a disservice to yourself. Also the larger players have larger trades so their strategies are much different from a regular trader and there are lots of places for small accounts (under $5m) to make money.
Re: Robinhood 20yo trader with no income loses 700k on options, takes life
#186All I have done is looked for somewhat stable dividend payers, bought those, and held them until various unpleasant circumstances forced me to liquidate. The service I am using now has good guardrails, nice screeners, very responsive customer service, and I am pretty happy with them. The first one tried to look like it was out of Trading Places and was so confusing that I didn’t manage to make a trade on it before dumping it.
At the least I know I don’t know everything in stocks. I know enough to ask questions when I don’t understand. My account is still set to zero margin and will stay there for the time being.
Re: Robinhood 20yo trader with no income loses 700k on options, takes life
#187This is tragic. The consensus I've gathered is that this was a result of a stock option credit spread's short leg being assigned combined with a misunderstanding of the trading platform's reporting. If this is true, an analogy for the situation would be: The individual bet on a coin flip, wagering $10 (representing the $700k) on heads and $9 (figurative amount representing the spread) on tails. The outcome was tails.…
How do you know this?
Hard to be completely sure without RH or the family specifying, but browsing r/WSB’s thread on the incident, looks like a lot of people have encountered this exact same issue and had it clear up the next day
Re: Robinhood 20yo trader with no income loses 700k on options, takes life
#188Robinhood is one of those Silicon valley companies that feels that the rules don't apply to them you. People have been yelling for years that "HEY THERE IS A REASON YOU SHOULDN"T BE DOING THAT." The tide has been coming in, and this is ABSOLUTELY no surprise.
Is it really Robinhoods fault that someone made a poor decision? If the individual in question had paid $4 to execute that transaction would that have been fine?
That's what I say about drug dealers, aren't they just like pharmacists without all the flim-flam? And if people decide to make poor decisions with drugs, why stop them?
Re: Robinhood 20yo trader with no income loses 700k on options, takes life
#189Earlier quoted context omitted.
I think every high school student should have one day class dedicated on following topics and so many lives would be saved: 1. Folies of investments, how you can lose everything. 2. Folies of marriages, divorce laws and how you can lose everything. 3. Folies of gambling in casinos and how you can lose everything. 4. Folies of alcohol, tobacco and other soft drugs and how you can lose everything. Each of these class s…
I taught my children all of these. Except 2), as they are girls:)
You're doing them a grave disservice, then. If you're a woman who managed to build up savings beforehand, or was trusting enough to be the main earner while your husband was going through school, you can end up the worse off financially for making a poor marriage decision.
And don't forget to mention all the women who accept diminished lifetime earnings because they were the primary caregivers for the couple's children, and then find themselves struggling to support those kids and themselves if their husbands leave, no matter what child support was awarded on paper. Even if the father does come through on the court-ordered payments, she's never going to get that decade of her career back, or the retirement savings she missed out on.
Re: Robinhood 20yo trader with no income loses 700k on options, takes life
#190Earlier quoted context omitted.
It's the secondary market. Companies get nothing on a bet they win or lose. People betting on a soccer game have zero effect on the future of soccer.
Secondary markets can definitely influence the price of the underlying asset, especially if they're more liquid.
Derivatives? Do Barcelona change their tactics because I keep winning big on the first goal scorer?
This is a socially useless activity. Stop trying to force it.