I had a normal, and a leveraged long position, as BTC got a spike down, it instantly margin called at very crap prices (ie: the spike was so hard, that it went through my stop and bitcoinica margin call... slipping about 30 cents). This is a thing that I learned the hard way: BTC balance can get margin called WAAAAY easier than USD balance, because as the price falls, you both have losses on your "bet" and in your whole account value.
Exactly you used leverage on a currency which has sometimes 50%+ daily volatility.
This made the USD of the account go negative.
I left the account negative, holding only the long position, hoping that BTC would one day rise again.
Ok this is where it gets kinda stupid/sad. You left a negative cash balance based on "hope"? Why didn't you deposit more USD or sell some of the BTC?
I am trying to understand if you thought the company was going to allow you to keep a negative balance open indefinately? What if BTC dropped to $0.01 and the company left this uncovered levered posistion open. Who was going to absorb that loss? The company? You get the profits they eat the losses?
But bitcoinica force-sold my BTC, without telling me, in fact it does not even show in the history, there are no way to prove it with screenshots unless I show a old screenshot and a new screenshot, and then there are no way to prove I did not clicked the button myself... but I did not, since it would be stupid (I bought BTC at 8, selling it around 3 is idiotic).Yes that forced selling is called a margin call.
Any brokerage in the world would do the exact same thing. If the shortfall is small, you have very good long term relationship with the brokerage, and a large diverse portfolio they may give you a small window to immediately deposit cash to cover the margin-call.
If you read any brokerage contract regarding margin they all give the brokerage the right to close any posistion at any time to cover a margin call. The forced selling closed the negative USD balance, reduced your leverage and ensured the company didn't take a loss for your bad bet.
So, the intention of my warning is: Bitcoinica might reserve the right to close your long positions, without warning, without informing you, and they will not even bother to show information about it, you will only notice if you take a look at your balance.
I would remove the "might".
Bitcoinica like any brokerage in the world DOES reserve the right to close any levered posistion (long or short is irrelivent) if you exceed the margin requirements. Bitcoinica should include any forced selling in transaction log.
If they don't (would like to hear a response from Bitcoinica on that) it is something that should be corrected promptly.