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Just for ####s and giggles, this was the post I made exactly two weeks ago showing some of my stocks and how they’ve done.
I don't see how RH could just give any new investor a margin account. Unbelievably sad. Heart goes out to his family.
I’m not even sure margin was the issue. I suppose it’s needed to trade the spread. But these brokers are sophisticated. They’re not going to let a kid with $16k run up a 700k loss since they’d be on the hook for it. The issue just appears to be how they recorded the options. I had the same problem with HTZ. Ran a spread trade. Got assigned options so had a margin call but when you netted it out with the long calls, you’re just out whatever the spread was.
I agree that it was probably a spread. No way he was on the hook for $700k, maybe one side of the spread (and # of contracts) was exercised. This happened to me early last year where I saw a message where I was down $73k but I knew I had the other half of the hedge. Only cost me $2k as I was able to exercise the other half and close out the trade. His spread would have evened out, if it was a credit spread of course. If naked puts... ouch. No way RH would allow him to trade on that kind of margin for naked puts.
Agreed. That’s why when I saw it posted before that I asked if there were margin/options on RH. Shouldn’t the margin be limited to your current holdings? Allowing you to have options where you can go that negative is ridiculous. Obviously, there are cases of rogue traders who have done that but usually there’s a big company behind it such that it is allowed. Not that it hasn’t taken a company out but still there’s something real backing it just a liquidation. This kid had nothing to back stop those losses. That’s pretty negligent. I don’t even have options or margin set up on my account.
I bought some this morning before the open when it was down more than 10%. Sold it a few minutes ago. I only put $10 in my pocket, but it's $10 I can use elsewhere. That's not a stock I trust long term.
It's been many years since I traded options and had a margin account, but I always remember the software did wonky things sometimes when I was buying and selling like you all are talking about. Often it just took a few days to settle out, but there were times when I would get like messages saying "margin call" for some huge amount but I knew it just wasn't reflecting some trades I had done correctly yet.
In at 104.72Nibbled on some SE at 104.50, figured I would take advantage of the slight dip today. With this stock, it might go up another $20 before the next red day.Hopefully I’ll have some opportunities to buy even lower, though.
Agree. Sounds like it was more of a TD/SD reporting issue than a sizable loss. For all we know kid could be in the green now with the trade. RH needs to do a better job of educating their clients. Such a tragedy.
It might go into the basket we discussed earlier, relatively safe stocks like JNJ. It probably isn't growing much but at a PE around 22, dividend just below 2% and they're King of the stores... It won't make you wealthy but if you're looking for a safe spot with some gain for the rest of the year, perhaps.
Stonks go up.
I don't think it reflects the actual loss or gain in this case. If it was a credit spread, RH would exercise the other portion and balance out the trade. If there were a loss of a few thousand, or what have you as a result, the broker would take it out of remaining funds of the account. I'd guess RH would cover anything over that amount to settle.
https://youtu.be/Dprf75bbL3A
I missed my shot early this morning. Had a limit buy at $11.20 that it never got back to.
I miss the bottom also. Bet the bullet and took what I could. Not a huge windfall but enough to afford a half share of sea
I’ve learned not to be greedy on this. Buy half what you intend to at market and dca down if it drops further. Better to take a small win than nothing at all based on my past experiences
I keep saying to myself;
Yep, I am still learning this - especially when I look at what just a few cents differences it makes. My mentality of wanting to win my way gets in the success of owning the stock way.
30.83 here. Already up close to 1%. This board is like having 50 part time financial advisors.In at 31.01. Thanks for this
In at 31.01. Thanks for this
Got in a bit higher, $31.13
Just a blip at the end. Still climbing AH. Awesome turn around, actually bought more. In at an average of 31.55.
Resisting the urge to sell and bank my 3%. Gained a 1/2 percent on the S&P today thanks to Kroger and day trading Blmn and Opies!
My pleasure! Glad to be able to help. Let's keep the momentum going, guys.
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