this is one of the main reasons I am staying away from futures right now...this is the ONLY trading vehicle where you can lose more than is in your account...in Forex...the broker would simply liquidate and your account would be at zero...from my information
I think futures are...forex brokers automatically liquidate you if you get too low...not with futures...from my understanding
Pretty much the answer to all of your questions about whether the worst could happen is YES. And I believe that heavy debt from trading cannot be bankrupted away, but that is something based on reading a few years ago.
index futures aren´t that dangerous, compared to commodities they have circuit breakers and limit down even in pre/market. Moves of over 1000 DOW points and 100 S_P points don´t happen, not even with 9-11 only in case of like UFO´s suddenly landing, or dollar going from 1.50 to like 6 yes you can lose more than you have in your account, thats why you trade only intraday, and only with stops, and only with the brokers phone number next to your desk. preferably you have $5000 in a second brokerage account you can use for hedging in a most extreme scenario.
Now I understand your user ID. Limit down & limit up is basically not limiting your loss. It basically means that there is no one on the other side of your trade at the max extent allowed in the trading session. There is no guarantee you will get out with an acceptable loss. After 9/11, they closed the markets for a few days. Do you think people were getting out with a 5 point ES loss???
I don't understand why people always call futures inherently dangerous. Don't you guys know that you can protect yourself against a catastrophic event with far out of the money options? Nassim Taleb has a fund that does nothing else but bet on that event.... Is like buying health insurance....you pay a premium to protect yourself against the cost of a catastrophic illness.