question about account forced liquidation

Discussion in 'Trading' started by Optional, Oct 13, 2008.

  1. A friend of mine went into Friday with a
    200k margin call.
    He was heavily long the metals.

    So midmorning he sends in 200k but the positions are drastically moving against him.

    The account goes negative before the wire hits and his intraday margin call has gone to about 800k

    The clearing firm blows him out of all his positions.

    The 200k wire would have put the account out of negative LV but they still blew him out I guess because of the huge positions he had and intraday margin call.

    Can they do that? Were they wrong in blowing him out?
  2. katesdp


    yes, no
  3. He needs to read each of the terms he agreed to when opening the account.
  4. S^%& Happens
  5. sorry, but no way he wins.
  6. Your friend needs to better manage his portfolio risk or the broker/clearing firm will do it for you.

    So, in answer to your question: yes, no
  7. Traders are supposed to manage their own risk or the clearing firm does it for them.

    If your friend had been using IB he would have forced out of his positions as soon as he violated margin and he would have been left with a positive balance in his account.
  8. he deserved to be forced out for trading on his broker's dime
  9. Only fools pay margin calls. :cool: