I'm pretty new to trading and have been paper trading for some time, so I'm not sure about this stuff.

For context, I was messing around and practicing paper trading when I saw that my loss was more than my account balance at one point and immediately sold the shares. What happened after left me with the current question. I linked a screenshot of my account before I sold the shares.


So in the case of the screenshot, would I owe that $300 difference with a fixed funds account?

  • 1
    I don't know what a fixed funds account is but if the value of your brokerage account declines below the margin maintenance level, the broker will close your positions ASAP. That's not to say that one can't blow up an account and end with negative value. If you do that, the brokerage firm will chase you legally for compensation. Nov 11 at 4:06
  • @BobBaerker Fixed funds accounts (or settled funds accounts iirc) are accounts where you can only trade the amount you put in. For example, I have a trading account on SOFI setup to use $100 dollars from my savings and is not a margin account. So if I use my own money, in the scenario above, would I just lose all my money, or do I owe that amount even though I bought it with no margin?
    – L42
    Nov 11 at 6:44
  • 5
    If it’s not a margin account, how did it get negative? As long as you just buy, hold and sell stuff, you can’t loose more than your account balance. There has to be some other mechanism to create a negative balance.
    – Hilmar
    Nov 11 at 12:21
  • @Hilmar I was trading crypto pairs (ADA-BTC for the one in the original post) and saw that it brought my equity in the negatives.
    – L42
    Nov 11 at 20:18
  • Is this a virtual account? i.e. trading with fake money for practice? If so, I suspect its letting you do margin trades.
    – Cody
    Nov 17 at 22:48

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