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Yes, that is how it works when you buy stock on margin and do not have the cash to cover. When the price dips, the risk increases to the broker, and so they may
by avree 6y ago
Yes, that is how it works when you buy stock on margin and do not have the cash to cover. When the price dips, the risk increases to the broker, and so they may liquidate your position to cover.
- umvi 6y agoI see. I think that's a critical piece of context missing in that tweet: "Note: these particular shares were bought on margin. Buying on margin is borrowing money from a broker to purchase stock" I thought RH was forcibly selling a customer's stocks that the customer had previously purchased with their own money.