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After discovering the massive negative balance, Alexander took to Twitter to express his disbelief. He questioned how someone like him—a young individual with no significant income—could be exposed to such high-leverage trading positions. He mentioned his confusion regarding his trades in put spreads, indicating he was somewhat aware of his trading activity but lacked a comprehensive understanding of its implications.

Exploring the Mechanics of Options Trading

To comprehend how a negative cash balance can occur in a trading account, it's important to understand the mechanics behind options trading—specifically on put spreads. When trading options, particularly on an asset like the SPY index, traders can undertake various positions that involve both buying and selling options.