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Robinhood bug allows for “infinite leverage”

https://www.reddit.com/r/wallstreetbets/comments/dqg6xx/infinite_leverage_explained

by undefined3840 • 7 years ago

4 1 7 years ago

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undefined3840• 7 years ago

Some backstory: a Reddit user this past week started with $2k and somehow bought $50k worth of puts on Apple ahead of their earnings on margin on Robinhood and lost it all when Apple beat earnings and rose 2% the next day.

This should not have been allowed by Robinhood e.g. they did not intend to allow options trading on margin but failed to track the source of cash the user received from selling options on another stock.

Original post: https://www.reddit.com/r/wallstreetbets/comments/dpnzup/i_re...

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