Robinhood Traders Discovered a Glitch That Gave Them ‘Infinite Leverage’
It will be interesting to see if Robinhood will go after (i.e., pursue claims in court) teenagers who get carried away and rack up $50k+ deficits from this. The article links to a Youtube video of a young person watching their account (which they used this bug to accumulate a $50k+ position in Apple puts right before they beat earnings recently) evaporate in front of their eyes, going deep into negative territory. Even though Robinhood has a good legal claim here, it would be very bad PR for people to start thinking that they can lose a lot more than they put into their accounts. Bad enough that you can lose all of that in the blink of an eye with margin trading, but it should be impossible to mortgage your whole future that way!