Just stumbled on this one... https://news.bloomberglaw.com/secur...er-through-craigslist-ad-must-repay-brokerage https://src.bna.com/MgB?_ga=2.12817268.279715137.1573352944-229417801.1573352944 -Man sees Craigslist ad, "let a high level trader make you money" -Opens account with $10k, gives access to trader. -Trader plans to make $1K/day in crude futures. -Day one, down $75K on 750 contracts. -Down $125K by time all contracts Liquidated.
the CL is worth a look.... if someone can lose that much so quickly it's almost equally possible to make that much!
I suppose this is why you really need a good lawyer if you're trading other people's money. But also 750 contracts holy shit. As a side note, after about a 6 pack of beer I enjoy going through craigslist job ads to see what kind of garbage scams there are. It's fun to read the to good to be true offers. I've noticed a significant uptick in "trade from home" type job listings recently primarily from fly-by-night forex prop firms. I have a crude spread out right now in my speculative account, and while it's losing money ever so slightly the swings from +10% to down 3% have been stomach churning. CL has definitely helped me realize my own risk tolerances.
A horrible story, and one that bears the need to repeat the mantra...Caveat Emptor. A promise of 10% per day in Crude? Oi! Optionsellers.com-type thinking. Sure, it can happen if you are lucky enough, but law of averages catches up to ya and WHAM, no more Bosco.
Oh, also notice in the document... "Had the default risk procedures been in place, Evert should have only been able to place around twenty contracts..." Dayum, even AMP doesn't offer a day-trade discount that low on $10,000. You can get 10 contracts max with that amount. Good grief. Always be careful with leverage!
I'm glad Interactive Brokers does not have reckless default risk procedures. I can sleep soundly when I have cash in the account.
Makes no sense. I'm not sure what the exact day margin for CL is, but can you even trade that many lots with just $10K? I doubt it. Moreover, with the technology we have today, most (if not all) brokerages would have force-liquidated the position once the account fell below the margin.
In the last few years the lowest I've ever seen CL initial margin on CME was $2145. Must be some pretty bad lawyers out there that didn't get the amount reduced because of Ironbeam's lack of duty of care. Fools. Money. Parted.
I'm sure Ironbeam didn't want to just let all that money go. But then they went to court and entered it into the public domain what rubbish traders they actually were. You can only hope the bad publicity means an end to Ironbeam and the likes.