eli5: How do people lose more than 100% in stocks?

457 views

How is it possible? I thought you can only lose what you put in. So 100% max. But I’ve seen news and posts about how people lose much more than that.

In: 18

10 Answers

Anonymous 0 Comments

There are strategies such as trading on borrowed funds (margin), short selling (selling borrowed shares), or writing options contracts that can put someone into a situation where they owe more than their account value if they are reckless or unlucky

You are viewing 1 out of 10 answers, click here to view all answers.