Big Gaps and stops

LiboNZT

Junior member
47 3
Lately I was reading about the 2010 flash crash. I am very curious as to what would happen to a retail trader if he would get trapped in that messy situation. For example, if a retail broker had a position on P&G just before it dropped 25%,with a leverage ratio of 1/10 and a stop order at -3% from his entry would he end up owing money to his broker if his stops were not hit at all? I am assuming the worst case scenario here ( which actually happened) where there is no buying side at all. If his margin allowed his position to be open until the price declined to -10%, would he still be owing all that excess 15% to his broker just because there was nobody to buy his stop orders? Let's also assume that the trader in our paradigm was working with a broker who did not provide him a guaranteed stop.
 
 
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