No announcement yet.

A brokerage trading questions

  • Filter
  • Time
  • Show
Clear All
new posts

  • A brokerage trading questions

    I am new to options trading, I would like to see if anyone can help on my questions. As we all know options are highly leveraged, a market order of calls can lose a lot of money as well. What would happen in the following scenario? For example, buying a call expired on Nov 2 of RHT was $0.10 trading prior 29th Oct, 2018 and it jump to $37 a call at the open on the 29th. If I placed 100 calls BUY to OPEN using calls prior the exchange was opened but I only had $1000 cash in the account, do you think the brokerage would stop the trade because I don't have the money in the account to cover $37 a call? Is there any regulations on that to protect customers running into this kind of situation? I just afraid a situation like that will be awful.