While stock prices fluctuate to reflect changing market assessments of the value of a company, a stock’s price can never go below zero, so an investor cannot actually owe money due to a decline in stock price.
If a company goes bankrupt, its stock can conceivably be worthless, but no worse than that.
What happens if your stock goes negative?
When investors see the value as being very low, the price will fall, sometimes to $1 or less. However, a stock can never fall to a negative value. A value of zero indicates that no investor is willing to buy the stock, no matter how low the price – essentially, that the corporation has no value.
Can you go in debt with stocks?
Yes. You can be in debt (owe money) if a company goes belly-up and you own some of their shares. If the company goes bankrupt, then you simply lose those shares (or the shares crash in price). Regardless, you owe nothing because you had to buy the shares outright in the first place.
Can you owe money trading options?
If you’re new to trading, you might be wondering if options trading can put you into debt. In a word: yes. However, it doesn’t have to. You can also trade with no debt.
Can you lose more than you invest in penny stocks?
No — at worst, the stocks you buy will go to zero value, which happens almost never if you are buying shares of legitimate companies (that is, not “penny stocks”). Unless you borrow money to buy the stock.