If you have > $400 to cover the difference, then yes, you could keep on holding the stock at $500. But most people don't 'leverage' like that. So they either g

If you have > $400 to cover the difference, then yes, you could keep on holding the stock at $500. But most people don't 'leverage' like that. So they either get spooked and cut their losses (before the price goes on to $1000) or their broker steps in and basically says: "either you show us that $400 or we sell before your bad judgement becomes ours."