Loading ...Dear Lord! A quarter mil margin call. You done awesome ! My downfall was only $50k. I was trading commodities in the ’90s in my younger and naive days. One hot summer there was little rain in the midwest. I visited family there in August the the corn crop was dismal, stunted, and some fields were already dead, so I knew there would be a corn shortage, so I went long corn. The trade went well for a week or two, and I was $50k profitable when I doubled down on my contracts one Friday. I had a stop under the market that would have still netted me $10k profit, so I had no worries.
The market opened limit down on Monday. My brokerage forced me out of the trade (sold me) and gave me a $50 thousand margin call on Monday morning. I was stunned. This was my introduction to ‘no guarantees’ on stops, market manipulation, and the road to bankruptcy. I liquidated my IRA that had only $38k and put $12k on credit cards to pay the broker… and closed my account. Never did recover from the credit card debt and flushed it in bankruptcy a couple years later after struggling with debt payments.
Knowing what I know now about market manipulation, I’m guessing some BIG commodity user like Kellog or other wanted to make their cheap autumn ‘buy’ of corn for delivery, so the first thing they do is short the crap out of the market, run the stops, and then pickup distressed corn contracts on the cheap. It was a real cynical education for me, and I have never trusted paper markets since.