20-year-old lost 700k on Robinhood options, takes life

anitil wrote: post #6

joshbaptiste wrote: post #4

What happens if you over leverage and end up owing your broker after a bad trade and you can't pay it back..

For you? Bankruptcy. I imagine the broker would have insurance.

ok, something the poor kid could have bounced back from after a few years of bad credit etc... dam sad.

Re: 20-year-old lost 700k on Robinhood options, takes life

#8

Post by loremipsium » Mon, Jun 15, 2020, 6:57 AM UTC

joshbaptiste wrote: post #4

What happens if you over leverage and end up owing your broker after a bad trade and you can't pay it back..

In my understanding in buying options you can only lose the premium you pay upfront. Selling options however you can get burnt.

Re: 20-year-old lost 700k on Robinhood options, takes life

#9

Post by odiroot » Mon, Jun 15, 2020, 9:16 AM UTC

joshbaptiste wrote: post #4

What happens if you over leverage and end up owing your broker after a bad trade and you can't pay it back..

I'm surprised there's no enforced margin.

Re: 20-year-old lost 700k on Robinhood options, takes life

#10

Post by mam2 » Mon, Jun 15, 2020, 11:21 AM UTC

He actually didnt lose 700k it was a UI problem.