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The broker is on the hook. In one case the broker rebated the customer but I suspect most of the time they'll try to collect through regular debt collection channels.

Example: https://markets.businessinsider.com/commodities/news/oil-tra...

As the saying goes: If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem.

For you? Bankruptcy. I imagine the broker would have insurance.

ok, something the poor kid could have bounced back from after a few years of bad credit etc... dam sad.

In my understanding in buying options you can only lose the premium you pay upfront. Selling options however you can get burnt.

Depends. You can sell a in money call, and buy 2x out of money calls. You only lose if the asset's price falls between your sell/buy.

The point is selling isn't bad. Its not managing risk that kills you. And for this poor dude it did.

I'm surprised there's no enforced margin.