Does anyone know what his position was? Probably vertical put spreads, credit or debit could’ve resulted in this situation.

Short put vertical: Underlying is at 392, sell 200 390P, buy 20 389P. Underlying moves to 387, counterparty exercises 20 ITM puts, now you’re long 2,000 shares at 390, you exercise your ITM 389P and sell 2,000 shares at 389 for a net $2,000 loss.

Long put vertical: Underlying at 392, buy 20 390P, sell 20 389P. Underlying moves to 387, counterparty exercises 20 ITM puts, now you’re long 2,000 shares at 389, you exercise your ITM 390P and sell 2,000 shares at 390 for a $2,000 net gain.

Either one of these would’ve shown a negative $780,000 balance when the early exercise happened, poor kid didn’t know it was recoverable.