Agree with the above on margin but do you think this is a possible scenario.. Long a Put and the stock collapses No stock loan available Market disappears (market makers stop making markets on the options or massive spreads due to inability to short). On paper the holder of the put made a killing but upon expiration ends up in a short squeeze and loses millions.
There are option open interest and those will be transacted because the option sellers have an obligation to buy the shares at a certain price. In this case, the option sellers stand to lose their shirts. If the buyer of the put exercises those contracts, the option seller has to buy his stock at the strike price even if the stock can be bought at the very low levels. He can also, opt to just sell his put option to close his position.
Yeah all brokers are doing this. There are still a few brokers who are allowing trading in options. When push comes to shovel, you now know with whom your broker is in bed with. They have no problem letting you take on hundreds and hundreds of losing positions and now finally you've got positions that have high probability of winning and all of sudden they are worried about "risk for our clients". LOL Yeah how come they weren't worried before when you were losing? LOL
They are worried about counter party risk. https://www.cnbc.com/2021/01/28/int...rotect-the-market-says-chairman-peterffy.html
“Due to high volatility, we are requiring you to hand over your money to the nearest Epstein billionaire” "Don't call yourself Robin Hood if you screw over the folks of Sherwood the second the Sherriff of Nottingham calls."
Well we have been their counter-party all this time losing to them. What about our "counter-party risk"?? Have they ever thought about that? No, they just take our money and go merrily their way. It's time that they get into our shoes and get a feeling of what we've been feeling all these years trading against them. If the market is a zero-sum game then it's time for them to be on the "zero" side for a change. Power to the retail traders!! This is better than Occupy Wall Street. We just occupied it with $$. This is lot more fun!
If the clearing system cant handle people buying a single stock, its not a system, its a house of cards