Nightmare at dawn
Never before had I experienced a day go from zero to 100 so quickly. Thankfully, it’s an experience I now look back on with a tame grin. I had woken up as usual, at dawn, preparing to begin stock trading while remotely communicating with my trader friends (read: friends who happen to be traders) before my day job would kick in much later. No sooner had I peeked at the “balances” tab in my brokerage account had my panic attack ensued. Seeing a potential 6-figure debt, out of nowhere, staring me in the face caused me to jolt out of bed.
Wait, what? how? when? I just could not fathom how this came about. Given that I make several trades on a good day, taking full advantage of my margin account, I’m well accustomed to receiving money due notifications. However, these are for amounts I’d quickly settle by selling off a single security or transferring in additional cash.
For the uninitiated, a margin call is money that must be settled promptly: the majority of brokers offer two to five business days to settle it after which litigation is not off the table. Charles Schwab, my brokerage of choice for trading, (I also use Fidelity for longer positions) states on their website “…our brokerage firm may close-out some or all of the securities in your account without contacting you. You are not entitled to an extension of time on a margin call. After liquidation, your account may have no value, and you may still owe [your] brokerage firm for all or part of the original margin loan” These are details I was fully aware of and only served to heighten my panic attack.
Life works in mysterious ways and some people insist things happen for a reason - I find it difficult to disagree with them. Less than a week prior, I had stumbled on the very sad story of a young man who had taken his life after being hit with a $730,000 balance even though this had occurred since last year. As you may imagine, this story came back to my mind during this episode and almost haunted me. I paced around my home thinking about how this major wedge would turn my financial plans completely upside down and I came close to tears. Still, I could not clearly identify what may have caused this. I had made a fairly risky trade during market after-hours the previous day which would cancel, if unsettled, at market open but this was yet an unexpected outcome.
Finally, I got myself together and phoned the brokerage. I was on hold for an excruciating 30 minutes. All the while I was devising, in very creative ways, how I would pay up in the stipulated timeframe. Eventually, an agent responded. “Hello, how may I help you today?”. Flustered, I managed to concisely articulate my situation and she immediately proceeded to route me to a specialist. I was on hold for another 5 minutes and then it all came to an end as quickly as it started when he uttered: “Hello sir, I sincerely apologize, this was a computer glitch”.
Take less ✌🏽