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Hello ,
I am doing a final research before I open my first live account and I need you opinion and experience...
I can totally understand the risk of losing all your capital and I am totally prepared for that.But then I read ''you may incur losses beyond these amounts''. (pdf below)
So my question is :
Is this possible ? loose more than i have deposited?Has anyone experienced this before? Is it something that happens every now and then ?
thank you
Can you help answer these questions from other members on NexusFi?
It can happen, usually broker squares off but if he doesn't he can certainly knock on your door to recover extra. Though generally broker will call you first to prod you to deposit more, then forced square off and then recovery.
Here is simplified example, if suppose you have longed underlying with selling PE to eat premium (PE = Put option) without proper hedge, its possible to have unlimited loss as the underlying can fall to anything, even become zero. This is also true vice a versa, this often happens with people who are new to options and have unknowingly put their necks on chop board by selling options. I've seen people having to sell their home to pay off, I've also seen people simply running off and going off the grid in case debt is impossible to pay.
This is why generally playing with options can be very deadly before getting good handle on your risk management and hedging. Brokers don't care about you, they only care about you trading and they recovering their money if you lose.
Thank you LastDino and kevinkdog for your answers.I didn't know that I am a little bit afraid and disappointed right now
I didn't mention before that I am interested in day trading micro futures, in particular, Nasdaq-micro (not options, neither crude nor forex)and I am planning to go with a 1000$ account to get my feet wet.
So in practice
-with a 1000$ account
-day trading a few hours a day
-micro NASDAQ futures
seems less risky to you ?? I mean, how bad can it go..
..i don't know about negative 37, but that a virus from China would shut down the world and kill so many people i definitely wouldn't have believed you..Anyway ,you are doing very well telling me all these things and I appreciate it
So above you took the current price of NASDAQ multiplied per number of contacts that i am trading and found worst case scenario (if i am long)..I want to trade MICRO NQ not MINI NQ. Micro would be 1/10 of the value ,thus $1740 ??
Hello dmr1,
They say $500 account minimum..And $50 margin for day trading.
I always wanted to trade futures (and stay away from forex and all the things about brokers ,that sometimes they trade against you) and have ''direct access ''to the exchange but E MINIS was too big for me.
Since i discovered Micros I think it is a good idea (having 1/10 of the risk) to make a start with real money and see how it goes..And from my research in internet they talk about Micros as an opportunity for small investors to make a start with less capital
Tell me your opinion