Not their losses. Their entire principal.
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Last Monday the Korean stock market dropped almost 9% in a single session. |
The fall was steep enough that the exchange halted trading partway through the day to stop it. |
Underneath it was borrowed money. |
For months, everyday people had been taking loans from their brokers to buy stocks, mostly a couple of chip names that kept climbing. A lot of them were levered past 150%. |
When the market rolled over, the brokers started selling automatically. |
No phone call, no chance to wait for a bounce. By Monday more than 1.2 million accounts had hit that wall, and somewhere between 320,000 and 360,000 were liquidated all the way to zero. |
Their principal was gone. |
The mistake that did it isn't Korean or exotic. It's putting on a trade without ever asking what happens if you're wrong. |
Those questions take about a minute, and almost nobody stops to ask them, because the trade looks too good to slow down for. |
The people who got wiped out didn't run any checks. They saw a stock going up and they clicked buy. That part's a choice. |
I keep the five checks I run before every options trade in a short report. Run them before your next one. |
Get The 60-Second Pre-Trade Options Checklist |
I’d could easily charge $20-$30 for this, but given the current volatility in the markets, it’s available today at no cost. |
To your success, |
Don Kaufman |
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