Have you ever gotten a margin call?
A margin call is what happens when the market goes in a direction that leaves you owing money on a stock or option and the brokerage house calls you up wanting more money to make up the difference. Several years ago I got bonked bigtime by such calls by some of my not-so-favorite brokerage houses.
If you can’t cough up the dough, the brokerage house will sell your position to pay off what you owe them. If you take a financial bath, or are even wiped out, the only consolation the broker offers you is, “tough luck.”
There is no grace.
This sort of activity ruined me financially at the turn of the century. The brokers who were so happy to talk to me while I was trading wouldn’t even return my phone calls. In fact, when the market was falling and I desperately needed to execute trades, they would not take my call but left me on hold while the market tanked and wiped me out.
I wasn’t a happy camper.
Now, years later, some of those very same brokerage firms are getting a margin call. Two have bitten the dust and a third is precarious. While I don’t wish ill on anyone, I must admit that there is a certain satisfaction in seeing what goes around coming around.
That makes me happy that I’m not God…