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Nothing was stolen. He sold a put, and that put was exercised. He didn't have the cash to pay for it, so he was margin called and his portfolio was liquidated
by djbebs 6y ago
Nothing was stolen.
He sold a put, and that put was exercised. He didn't have the cash to pay for it, so he was margin called and his portfolio was liquidated accordingly. Until the liquidation happened, he still owed the cash.
This is the way these products are supposed to work.
These are complex products that arent for everyone, thats why you have to take a test and swear you're aware of the risks involved.
He took the test and passed, he also executed the strategy correctly.
The problem is not robinhood here. Its not even the money.
The problem is the parents are looking for someone to blame because of something that hurt them.
- unanswered 6y agoFrom TFA, the problem was not the $700k margin call, it was the lie that a $170k transfer was needed to make the account whole. You're conflating two different issues here.
- djbebs 6y agoThose are one and the same. He was 700k in debt, and needed to transfer 170k immediately or his account would be liquidated to make do on that debt. That isn't a lie, it is quite literally what a margin call is.