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Comment by mixmastamyk | Hacker News Reader

Me too, I went all in on Apple stock when the iPhone was announced, on margin I was so convinced. Sounds great right? Well broker sold everything during the 2008 meltdown and lost everything.

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Sounds like the broker had to sell everything because you went below your required margin ratio. A typical margin ratio is 50%, and AAPL collapsed by more than 50% during the 2008 meltdown, so it sounds like you got margin called.

If that is indeed what happened then that's on you for buying on margin (which is inherently riskier), and no fault of the broker. If that's not what happened, and the broker executed trades without instructions from you, I hope you got them fired at minimum.

Yes, even when making the right (though unnecessarily risky) call an unrelated third party can still show up out of the blue and ruin everything. There are more failure modes to luck than are commonly understood.

I learned something new. A broker can sell your stock without your consent?

Yes, see sibling comment.

It's similar to a bank foreclosing on a house. The borrower pledges something as collateral for a loan, and if things go south, the lender can liquidate the collateral to recover some or all of the debt. It's not correct to say it's done without the borrower's consent because the original lending agreement allows it when the circumstances arise.

Tangentially related: Martingale betting system (https://en.wikipedia.org/wiki/Martingale_(betting_system)). Aside from its theoretical impossibility, this system typically fails in practice when the gambler hits a house limit and can no longer continue placing bets.

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