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Let's say I short a stock and hold it overnight. And let's say it's doing very badly and the stock is gapping up over 100% during after market hours. Since I can't use a stop loss during extended hours, my loss keeps accumulating until the market opens.

My question is, could my broker issue a margin call and liquidate my position before the market opens? Otherwise, by the time the market opens, I'd have lost over 100%?

Also, have there been any cases where the loss keeps accumulating to the point where you actually owe the broker money?

Mac_79
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Any respectable broker will offer after hours trading. Some require that you request that ability (a formality). Then you can close the position.

If the value of your account drops below the maintenance requirement, most brokers will close the position immediately and most certainly, if there's a huge gap and your margin is next to nothing or gone.

And yes, there have been cases where the loss is large enough so that a trader ends up owing the broker money. Then, the legal fun begins.

Bob Baerker
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