Rookie Trader Racked Up $700K In Debt

Discussion in 'Wall St. News' started by ironchef, Jun 14, 2020.

  1. Overnight

    Overnight

    Buy and hold would have been a better strategy I guess. Like what every other fundamentalist in the world says, forever.



    P.S. Note the AAPL price back then, in Jan 2017. Wheee!
     
    #81     Jun 18, 2020
  2. tsznecki

    tsznecki

    @Actuarial_Fun How many tampons do we need to insert into you before you stop crying?
     
    #82     Jun 18, 2020
    Cuddles likes this.
  3. d08

    d08

    TBH, lately I've noticed quite a lot of women are much emotionally tougher than many men.
     
    #83     Jun 18, 2020
    Turveyd, tsznecki and NoahA like this.
  4. probably, he traded some else's money in his family , and made some big promise to that someone that he's not going to lose the money, but unfortunately, he couldn't delivery under pressure and responsibility, and probably, he couldn't see his ability for paying it back....
     
    #84     Jun 19, 2020
  5. guru

    guru


    No, it was Robinhood glitch that showed negative balance after being assigned one leg of a spread.
     
    #85     Jun 19, 2020
  6. zdreg

    zdreg

    This fact seems to be overlooked by posters here.. . What happened to the other leg of the spread? If the other leg was not closed risk management is disaster at robinhood.

    Didn't this kid talk to someone at RH when he saw the negative balance. Did someone at RH give him incorrect information? It would not be surprising.
     
    Last edited: Jun 19, 2020
    #86     Jun 19, 2020
  7. guru

    guru


    RH doesn’t support shorting stocks, so when you end up being short through an option assignment, it usually shows negative balance, locks the account for a day, then sells or exercises the remaining leg the following night.
    But I’m assuming the guy got terrified, traumatized and shocked after seeing the negative -$700K balance, and didn’t think straight. Happens to traders who blow their account, and I guess he assumed that’s what happened to him, and way beyond blowing his account. It was stupid and didn’t deserve to end in death, but unfortunately it did. If he just ended up in a hospital he could’ve been awarded Darwin Award. Unless, wait, is the Darwin Award meant for dead people?
     
    #87     Jun 19, 2020
    Turveyd likes this.
  8. Turveyd

    Turveyd

    But atleast he got an award, his parents will be proud.
     
    #88     Jun 19, 2020
  9. zdreg

    zdreg

    This kid was mentally unbalanced which is obvious.
    Like many retail traders he knew next to nothing about the product he was trading. In the money options, particularly deep in the money get exercised frequently.
    RH is also likely at fault for failure to make disclosures.
    RH will likely be fined by the SEC.
    The negative balance, which was temporary in nature would likely would show up at most brokerage firms.
    RH might have been negligent by not taking immediate action to liquidate or exercise the other leg.
    RH could have called the customer to inform him of the negative balance and the action that the firm was going to take.

    There is more to this story. What role did Sullimar Capital, a family hedge fund, play in this fiasco.https://www.marketwatch.com/story/f...rader-who-racked-up-700000-in-debt-2020-06-14
     
    Last edited: Jun 19, 2020
    #89     Jun 19, 2020
    guru likes this.
  10. themickey

    themickey

    This is nonsense about retail a driving factor and forcing Wall Street to chase the market after them.
     
    #90     Jun 19, 2020