Mar 29 2021, 05:16 PM
QUOTE(Angelic Layer @ Mar 29 2021, 04:44 PM)
Let's say you got $10, they let you borrow $100 to buy stock out of the $10 you have, so 1:10 leverage.
You use all $100 to buy in a stock, now the stock drop 25% due to dilution, so they ask you to come out with $25 in cash to cover the losses, you don't have the money to pay back so they have to sell all in the market to recover money and you still owe them for the outstanding amount.
not 10:1 leverage?You use all $100 to buy in a stock, now the stock drop 25% due to dilution, so they ask you to come out with $25 in cash to cover the losses, you don't have the money to pay back so they have to sell all in the market to recover money and you still owe them for the outstanding amount.
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