Recently, high-risk funds such as XIV and SVXY dropped more than 80% overnight, causing many margin-trading investors to fall into substantial debt with their brokerages. Margin trading allows investors to borrow money from a financial brokerage to purchase stock. In order to trade on margin, an investor needs to open a margin account with a brokerage.
Margin trading can be risky. If an investor’s account falls below a minimum amount, the brokerage can demand that the investor deposit more money into the account. This is known as a margin call. When a stock loses value and a brokerage makes a margin call, investors may suddenly owe a lot of money to the brokerage.
If you are in debt with your financial broker due to a margin call, the experienced lawyers at Chauvel & Glatt can help negotiate a repayment plan and potentially a significant reduction of the debt. To learn how our attorney can assist you, contact us today.