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vincentvega

Registered: Feb 2012
Posts: 110

07-08-12 09:03 PM

I'm trading through an LLC and have lost over 55% of my capital this quarter. I have options that expire in a couple of months. They would put my company at break even or under water if they were closed today. I'm still betting on these options coming out good. If they don't, I won't be able to pay them. Would declaring bankruptcy give me limited liability, even if it means my company or even myself will be banned from trading ever again?

Please don't post on my thread with name calling or any other crap. I understand I'm an idiot who should have quit during the holidays. I'm just trying to get some serious points of views.

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1245

Registered: May 2012
Posts: 518

07-08-12 09:53 PM

Quote from vincentvega:

I'm trading through an LLC and have lost over 55% of my capital this quarter. I have options that expire in a couple of months. They would put my company at break even or under water if they were closed today. I'm still betting on these options coming out good. If they don't, I won't be able to pay them. Would declaring bankruptcy give me limited liability, even if it means my company or even myself will be banned from trading ever again?

Please don't post on my thread with name calling or any other crap. I understand I'm an idiot who should have quit during the holidays. I'm just trying to get some serious points of views.

The broker will not let you drop your equity below zero. They will liquidate your account first. Declaring bankruptcy would not be a solution.

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vincentvega

Registered: Feb 2012
Posts: 110

07-08-12 11:29 PM

Quote from 1245:

The broker will not let you drop your equity below zero. They will liquidate your account first. Declaring bankruptcy would not be a solution.

These are options.

Why would it not be a solution specifically? This is a limited liability company. I guess that is my real question, is if an LLC will protect me in a disaster.

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clacy

Registered: Sep 2006
Posts: 2396

07-08-12 11:40 PM

I'm guessing there is next to a zero percent chance that you're not personally guaranteed on the account. I can't see how any broker would allow accounts to be set up without someone being personally liable.

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1245

Registered: May 2012
Posts: 518

07-08-12 11:48 PM

Most brokers NO NOT require personal guarantees on a LLC account. 1/2 the reason traders use an entity is for personal protection through the LLC.

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1245

Registered: May 2012
Posts: 518

07-08-12 11:52 PM

Quote from vincentvega:

These are options.

Why would it not be a solution specifically? This is a limited liability company. I guess that is my real question, is if an LLC will protect me in a disaster.

I'm now very confused by your questions. You're losing a lot of money in your trading account, owned by an entity. If the entity, which has assets in the brokerage account and maybe a checking account goes to zero, that's it. They can't go after your person assets. Why would you go through personal bankruptcy? If the LLC has no assets, the LLC does not have to file. There are just no assets there.

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