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if you've lost 100k, you had 100k to spare. agree it was an expensive lesson.
by mirceal 9y ago
if you've lost 100k, you had 100k to spare. agree it was an expensive lesson.
- pfarnsworth 9y agoYes, it sucked losing that much money but I'm lucky and grateful that it didn't alter anything about my life.
- icebraining 9y agoif you've lost 100k, you had 100k to spare Not if you're leveraging! For an extreme example, this guy lost $210k of borrowed money: https://www.bogleheads.org/forum/viewtopic.php?f=10&t=5934&sid=e650e39b31b9f119b3a8da32242c7049 https://www.bogleheads.org/forum/viewtopic.php?f=10&t=5934&s...
- downandout 9y agoAnother example is Chris Sacca, who burned through $16 million - $12 million in paper gains, and $4 million in borrowed money. From [1]: Starting with around $10-$20,000 in what were college loans, Sacca realized that brokers weren’t accounting for margin usage on a real-time basis. The result was that even though firms were only allowing 50% margin, as long as a customer closed a trade before the trade settled, T+3, and showed proper equity in the account, positions larger than 50% margin usage could be opened. Picking winners of stocks that by Sacca’s account had risen 40x, and betting with positions well above his margin requirements, his account grew to $12 million in 18 months. But, as we all know, the record levels of the Nasdaq and the dot com bubble of that time eventually burst....When it did burst, and even though the damage was from holding just two stocks, Sacca found himself in the hole with a $4 million negative balance. [1] https://www.financemagnates.com/forex/brokers/chris-saccathe-4million-negative-balance-salinger-group-twitter/ https://www.financemagnates.com/forex/brokers/chris-saccathe...