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I just opened up my margined account on Interactive Brokers and it shows a large negative cash balance (exactly equal to what I borrowed on margin). I guess an
by bigpumpkin 6y ago
I just opened up my margined account on Interactive Brokers and it shows a large negative cash balance (exactly equal to what I borrowed on margin). I guess an inexperienced trader could've mistaken the negative cash balance as having negative equity value. Alex Kearns had a negative cash of -730k but a positive equity of $16k . Why did Robinhood send him an email asking for $170k in a few days?
Then later after his death, he received another email from Robinhood:
"Great news! We're reaching out to confirm that you've met your margin call and we've lifted your trade restrictions."
Did Robinhood's margin call system make a mistake?
- deleted 6y ago[deleted]
- beervirus 6y agoAllegedly he had a trade set up with multiple legs. He wrote some puts and bought some mostly-offsetting puts. He got assigned on the puts he wrote, but the profit from the other leg of the trade didn’t show up in his account until the next business day.
- totalZero 6y agoYou don't know that you're assigned until the day after it happens. Even if you immediately exercise offsetting options upon notification of assignment, it takes a business day to clear out the shares.