Just wondering if anyone has had experience of blowing up a first trading account (resulting in a negative balance one's UNABLE to pay back), and subsequently opening a second account with the same broker? Even if the first account is set up as a limited liability corporate account, wouldn't the broker identify the owner and thus reject future account applications (whether individual or corporate) by the same person? Any thoughts are greatly appreciated.
Likely a big NO on both issues. If you have uncollectable debit with broker, he surely won't want to do business with you again ... perhaps if you post the full, notional value of whatever you trade.... but otherwise not. (Hey, you've already stiffed the broker once... not intentionally, of course... but still.) No broker with half a brain would accept an LLC as a customer... possible exception, you've got audited financials with LOTS of equity to pay any deficiency incurred. Even then he's going to "watch you like a hawk", because he knows he has no personal recourse.
I could choose between 3 different US brokers for opening of an account owned by a company structure in Europe that is similar to a LLC. No problem at all, and no personal guarantee. So there seem to be several brokers with a half brain or even without any brain at all. I must admit that it was a rather small account, as it was basically used to find out what the fiscal implications would be in Europe. But the account was used for real trading futures.
You should worry about that 2nd account because when you fund that 2nd account...the broker may already know who you are and will then just "deduct" the funds from the 2nd account to pay off the debt in the 1st account that you blew up. Regardless if such is legal or not...you should call your broker to pay your debt prior to trading in that 2nd account. I don't know what broker you're with but some brokers allow "linking" different types of accounts at the same brokerage...similar to the way banks do it. If your broker has such...transfer the money over to pay the debt because eventually they will know and contact you about the two types of accounts you have and the debt in one of those accounts. wrbtrader
I can't imagine why they would until at least you pay the balance. I have an entity account with no PG but have perfect personal and entity credit.
Thanks guys for the advice Respect to all of you for having traded for so long but never had a blow-up.
I would guess that most of us have blown up before. I blew up a large account and a couple of small ones early on....part of the dues.
Good to know. After blowing up the accounts, were you ever left with large negative equity in the account?