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Robinhood user exploiting margin loophole to turn $4k into $1M position

12 pointsby undefined3840over 5 years ago

1 comment

undefined3840over 5 years ago
If I understand it correctly, the user bought stock in a company (in this case $F) and then sold deep in the money call options, which is returned to your account as cash which is being mistakenly calculated as additional buying power. He then used the additional cash to buy more stock, and repeated the cycle to get to $1M.<p>This is a massive accounting issue on RH’s part and almost certainly breaks FINRA rules for margin trading.
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