I was trading a stock back in the early 90s where a stock went from $3 to $13 in one week and became marginable. Big mistake, people were walking in with $50,000 cashier checks buying stock at $13. Only to get blown by our margin manager at $3 the next day. Our margin dept. was bringing in tickets faster than we could trade out of the positions.
These people not only lost their entire position, they were blown out of other positions, and if they did not have money to pay for it, got sued and put on the FRB restricted list.
I made $225,000 in my trading account that week, but our firm fell below our net cap, so we had to borrow to cover until we settled out of our clients mess.
Nobody should invest in speculative stocks what they cannot afford to lose.
