I’m not really well versed in stock trading but isn’t there a thing called margin call that would close the position once the traders loss is close to his balance? Why isn’t it happening in this case?
When dozens of Robinhooders owe their broker $100,000, it's Robinhood's problem.
In this case, Robinhood generally applies margin calls near the end of the trading day. However, in this case, the trader's account equity went from $50,000 to -$100,000 in the span of seconds.
Robinhood did in fact liquidate his position at the end of day preventing further losses, but they are already on the hook for a 6-digit sum. (Yes, legally margin debt is the trader's problem. But I doubt they will/can collect on this.)