34 ms·
He wasn't a professional trader or anything like that. He was a kid with no income. Was they did they allow him access to so much leverage?
by wdr1 6y ago
He wasn't a professional trader or anything like that.
He was a kid with no income. Was they did they allow him access to so much leverage?
- def8cefe 6y agoGuessing it's related to a bug on the platform from last year. https://www.bloomberg.com/news/articles/2019-11-05/robinhood-has-a-glitch-that-gives-traders-infinite-leverage https://www.bloomberg.com/news/articles/2019-11-05/robinhood...
- BoorishBears 6y agoIt's now coming out that he didn't have access to that kind of leverage. Robinhood will show one leg of a multi-leg options strategy as your balance in certain cases. So you have theoretically sold 700k in calls, but it's covered by a near equal amount of options being bought, there is no scenario in which you could actually owe 700k Yet Robinhood's engineers didn't properly implement the feature, so their account balance showed the calls as if they had been sold naked, resulting in -700k as a balance.
- manigandham 6y agoThere's nothing to implement differently, this is how all brokers show it because one leg might be exercised anytime, and if it happens before the broker executes the other side you will see a big discrepancy in your account. It's up to you to understand your trades.