6 ms·

If only he'd realized that he could declare bankruptcy, he might not have been so overwhelmed. I think it wrecks your credit for about 7 years (?), but it's not

If only he'd realized that he could declare bankruptcy, he might not have been so overwhelmed. I think it wrecks your credit for about 7 years (?), but it's not the end of the world. This is so sad.

filoleg 6y ago
The thing is, he actually probably would've made some profit on that trade (or a small loss) after it all was said and done. He had a spread position, but only one leg of that spread was executed, while the other was still pending. So while the second leg is pending, the UI would only show one on the chart (while the other one is clearly marked in the UI as still active). Until that second leg is executed too, you will see that weirdness on the chart. But if you know how spreads work even on the most basic level, you will easily understand that this is not the actual balance of your account, it is just the pending balance until the other leg is executed. And the other leg was guaranteed to be executed, so it isn't like there was some uncertainty about that. All it takes is one business day tops for the second leg to get processed. For those curious, there are other comments in previous threads that explain the situation in much better detail, such as this one. [0] This is a very known thing with spread positions, can be verified by just googling for a few minutes. And while his death is a tragedy that was easily avoidable, I don't think that it is fair to blame RH for this man's failure to do less than a few minutes of googling. Important to note, this isn't unique to RH, this is pretty much how every broker displays that specific kind of a trade in their UI. And it isn't because they are all bad at UI, but because it is indeed an accurate representation of the state of the account at that moment. You just gotta make sure you actually understand the information you are looking at. And if you are doing option spreads with even the most basic knowledge of those, you should already be able to easily understand what those charts are actually displaying. Not even mentioning that the parents claim he opened a trading account and started trading options as a college freshman, which is kind of impossible to get an approval for from RH (or any other broker) unless you make a lot of money already or lie on the application. And we know he didn't make a lot of money, because some of the headlines on the matter have mentioned "RH trader with no income manages to open a $750k position". So he indeed went around the rules (and the law) by lying to get a permission from the broker to trade options. Not trying to blame him for what happened, the situation is just unfortunate all around. I am simply struggling to think of anyone who could be honestly and justly blamed for this situation, aside from, maybe, his parents. But even that is a stretch. 0. https://news.ycombinator.com/item?id=23554588 https://news.ycombinator.com/item?id=23554588
- ClumsyPilot 6y ago
  Thank you for informative post, however I feel you are being unfair to the kid. "this man's failure to do less than a few minutes of googling" is true if you know what to google, but not if you are clueless. Setting up OAuth is a few minutes of googling to me, but not to the boss of my boss.
  - filoleg 6y ago
    >however I feel you are being unfair to the kid I agree with you overall, but I don't think I am being unfair to the kid. That's the entire reason why I am extremely hesitant to say that it was all his own fault. I don't think it was purely his fault. And there is a reason safeguards for trading options exist, but he was smart enough to google what specifically he should lie about on that application to get the permission for trading options from his broker. >"this man's failure to do less than a few minutes of googling" is true if you know what to google, but not if you are clueless. >Setting up OAuth is a few minutes of googling to me, but not to the boss of my boss. Makes perfect sense. But if the boss of your boss goes around the company rules, gets access to modifying live prod (by lying to whoever is in charge of granting permissions), and then makes some clueless changes to OAuth in prod that end up bringing down the entire auth infrastructure, I don't think it would be fair to blame OAuth for this. Not a perfect analogy, given that the kid didn't actually blow his account, he just couldn't read the charts for the type of options he was trading. But the main point of what i am trying to illustrate with that analogy still holds.
    - ClumsyPilot 6y ago
      > "he was smart enough to google what specifically he should lie about on that application to get the permission for trading options from his broker." That's a tough one, but I presume he did try to google things before offing himself? Or do you think he just panicked? We've had issues with people lying on online prescription forms in the UK and getting opioids and other controlled substances. Once one person has got them, the 'right answers' spread online and tons of less-informed folks get in. I don't think you can rely on any online form without checking documents.
tantalor 6y ago
Maybe the parents could have tried harder to educate their kid about financial risk and consequences.
- throwawayboise 6y ago
  The "kid" was 20. An adult man. How much insight do you suppose the parents had into his financial activities?
- ClumsyPilot 6y ago
  I feel this comment is a mean platitude, given that most people on HN do not understand options trading and probably you are one of them. I am.
- totalZero 6y ago
  I'm sure they will spend their lives wishing that they could go back in time and do so. However, it's impossible to see every risk that comes the way of your loved ones.
synaesthesisx 6y ago
Or, as often said on WSB (like the numerous times people have accidentally discovered "infinite leverage" glitches), "Just delete the app!". Seriously, people have done that - and Robinhood is too incompetent to follow up or take legal action.
- rrrrrrrrrrrryan 6y ago
  It's more likely they realize trying to collect on that money would kick off a protracted legal battle, which they might lose. Investors do have some protections, and a glitch allowing infinite leverage is a definite, absolute fuck-up on Robinhood's part, which might be exploitable in court, not to mention the bad publicity it'd bring. (E.g. Robinhood sues working family into bankruptcy over glitch in its own app.)

If only he'd realized that he could declare bankruptcy, he might not have been so overwhelmed. I think it wrecks your credit for about 7 years (?), but it's not the end of the world. This is so sad.

filoleg 6y ago

The thing is, he actually probably would've made some profit on that trade (or a small loss) after it all was said and done. He had a spread position, but only one leg of that spread was executed, while the other was still pending. So while the second leg is pending, the UI would only show one on the chart (while the other one is clearly marked in the UI as still active). Until that second leg is executed too, you will see that weirdness on the chart. But if you know how spreads work even on the most basic level, you will easily understand that this is not the actual balance of your account, it is just the pending balance until the other leg is executed. And the other leg was guaranteed to be executed, so it isn't like there was some uncertainty about that. All it takes is one business day tops for the second leg to get processed. For those curious, there are other comments in previous threads that explain the situation in much better detail, such as this one. [0] This is a very known thing with spread positions, can be verified by just googling for a few minutes. And while his death is a tragedy that was easily avoidable, I don't think that it is fair to blame RH for this man's failure to do less than a few minutes of googling. Important to note, this isn't unique to RH, this is pretty much how every broker displays that specific kind of a trade in their UI. And it isn't because they are all bad at UI, but because it is indeed an accurate representation of the state of the account at that moment. You just gotta make sure you actually understand the information you are looking at. And if you are doing option spreads with even the most basic knowledge of those, you should already be able to easily understand what those charts are actually displaying. Not even mentioning that the parents claim he opened a trading account and started trading options as a college freshman, which is kind of impossible to get an approval for from RH (or any other broker) unless you make a lot of money already or lie on the application. And we know he didn't make a lot of money, because some of the headlines on the matter have mentioned "RH trader with no income manages to open a $750k position". So he indeed went around the rules (and the law) by lying to get a permission from the broker to trade options. Not trying to blame him for what happened, the situation is just unfortunate all around. I am simply struggling to think of anyone who could be honestly and justly blamed for this situation, aside from, maybe, his parents. But even that is a stretch. 0. https://news.ycombinator.com/item?id=23554588 https://news.ycombinator.com/item?id=23554588

ClumsyPilot 6y ago
Thank you for informative post, however I feel you are being unfair to the kid. "this man's failure to do less than a few minutes of googling" is true if you know what to google, but not if you are clueless. Setting up OAuth is a few minutes of googling to me, but not to the boss of my boss.
- filoleg 6y ago
  >however I feel you are being unfair to the kid I agree with you overall, but I don't think I am being unfair to the kid. That's the entire reason why I am extremely hesitant to say that it was all his own fault. I don't think it was purely his fault. And there is a reason safeguards for trading options exist, but he was smart enough to google what specifically he should lie about on that application to get the permission for trading options from his broker. >"this man's failure to do less than a few minutes of googling" is true if you know what to google, but not if you are clueless. >Setting up OAuth is a few minutes of googling to me, but not to the boss of my boss. Makes perfect sense. But if the boss of your boss goes around the company rules, gets access to modifying live prod (by lying to whoever is in charge of granting permissions), and then makes some clueless changes to OAuth in prod that end up bringing down the entire auth infrastructure, I don't think it would be fair to blame OAuth for this. Not a perfect analogy, given that the kid didn't actually blow his account, he just couldn't read the charts for the type of options he was trading. But the main point of what i am trying to illustrate with that analogy still holds.
  - ClumsyPilot 6y ago
    > "he was smart enough to google what specifically he should lie about on that application to get the permission for trading options from his broker." That's a tough one, but I presume he did try to google things before offing himself? Or do you think he just panicked? We've had issues with people lying on online prescription forms in the UK and getting opioids and other controlled substances. Once one person has got them, the 'right answers' spread online and tons of less-informed folks get in. I don't think you can rely on any online form without checking documents.

tantalor 6y ago

Maybe the parents could have tried harder to educate their kid about financial risk and consequences.

throwawayboise 6y ago
The "kid" was 20. An adult man. How much insight do you suppose the parents had into his financial activities?
ClumsyPilot 6y ago
I feel this comment is a mean platitude, given that most people on HN do not understand options trading and probably you are one of them. I am.
totalZero 6y ago
I'm sure they will spend their lives wishing that they could go back in time and do so. However, it's impossible to see every risk that comes the way of your loved ones.

synaesthesisx 6y ago

Or, as often said on WSB (like the numerous times people have accidentally discovered "infinite leverage" glitches), "Just delete the app!". Seriously, people have done that - and Robinhood is too incompetent to follow up or take legal action.

rrrrrrrrrrrryan 6y ago
It's more likely they realize trying to collect on that money would kick off a protracted legal battle, which they might lose. Investors do have some protections, and a glitch allowing infinite leverage is a definite, absolute fuck-up on Robinhood's part, which might be exploitable in court, not to mention the bad publicity it'd bring. (E.g. Robinhood sues working family into bankruptcy over glitch in its own app.)