ETrade did not respond to a request for comment by CNNMoney.
Joe Campbell had $37,000 in his online brokerage account when he went to bed on Wednesday night. The effort eventually raised more than $5,000, though Campbell also took flak. This trade was even more dangerous because Campbell held the position overnight, when he couldn’t have done anything if the stock moved up.
CNNMoney (New York) First published November 20, 2015: 11:34 AM ET
. By the time he woke up, not only had all that money vanished, but the amateur trader actually owed ETrade more than $100,000.
According to his GoFundMe page, Campbell placed a risky bet on Wednesday against KaloBio, (KBIO) a little known pharmaceutical company that was trading at $2. Campbell was basically betting that the stock would fall further.
“If someone feels my pain and is willing to help out — who am I to say no?” he wrote.
“Never in my wildest dreams did I imagine Etrade would NOT have some sort of stop or circuit breaker in place,” Campbell wrote, adding that he was upset the online brokerage didn’t notify him.
Campbell was in such a desperate spot that he even set up a GoFundMe campaign begging for help.
Some readers were critical of the request on GoFundMe, which is more often a platform for people needing financial assistance for medical bills, disaster relief or to help the poor.
Related: Controversial CEO takes over cancer drug maker KaloBios
GoFundMe campaign raises $5,000+
Campbell said he will do what he can to pay back ETrade, including liquidating his 401(k) plans plans and also his wife’s.
He claims he’s “never one to ask for a handout,” but did set up the GoFundMe account. Plus, KaloBios is a tiny stock, making it susceptible to violent moves, in both directions. He was the victim of poor judgment — and his ordeal should serve as a lesson for all investors.
One user called him “pathetic,” while another said, “Man, you should have saved your GoFundMe request for your divorce fees, not E-Trade.”
Still, Campbell’s efforts raised $5,300 through 151 donations before he took down the campaign on Friday. Campbell thanked the donors on behalf of his wife and kids and called the generosity “unbelievable.”
“What an expensive lesson that was,” he wrote.
Reality was far worse.
No, Campbell wasn’t the victim of evil hackers. KaloBios shares had surged to $16 after the controversial former hedge fund manager Martin Shkreli had bought a stake. ETrade (ETFC) said not only had the account gone to zero, but he was on the hook for $106,445.56.
So-called “short” bets are always risky because in theory there is no limit to potential losses if the stock goes the other way.
Big bet backfires
When a friend who knew about his bet called the next morning to ask if he was okay, Campbell said his “heart dropped.” He feared all $37,000 in his account might have been lost