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Online broker and banker E-Trade Financial Corp. is in for the fight of its business life, as write-downs from subprime loans are possibly brinking it to the brink of bankruptcy.

On Monday the company continued to plunge in share price from Friday, when the company warned investors that there would be a growing number of write-downs in the fourth quarter.

As recently as their last earnings forecast last month, the company didn't foresee how deep the write-downs would be.

Sean Egan, managing director of Egan-Jones Ratings Co., which follows E-Trade's debt said about the company's problems: "If E-Trade doesn't get significant support in the area of between $2 billion and $4 billion within the next week, or possibly 10 days, they're going to be in dire straits."

In a comment that E-Trade called irresponsible, Citi's Prashant Bhatia put out the possibility that there could be a run on the company's bank. The implication being that the company isn't fixable.

Some of this problem came from E-Trade CEO Mitchell Caplan wanting the company to triple its loans outstanding, which meant taking on more risky loans. It obviously backfired as banking institutions around the world have been finding out.

Shareholders punished the company, with market value dropping by over half Monday, as investors ran from the company.

It's been amazing how quickly the company has fallen, as the quarterly loss reported last month was the first in five years, based on the subprime meltdown. They reported a loss of $58.5 million, far below the $153.2 million profit from the year before.

The overall exposure for asset-backed CDOs and second-line securities stands at about $450 million as of September 30. That includes $50 million that has been downgraded to junk status.

In spite of the problems, E-Trade does have the usual protections in place that other financial institutions have. They are a member of the Securities Investor Protection Corporation (SIPC), which is the first line of defense if a brokerage fails.

The SIPC offers protection to securities up to $500,000, which includes $100,000 for cash claims.

There is of course the Federal Deposit Insurance Corporation (FDIC) which insures deposits at E-Trade Bank for $100,000.

The company also has insurance from London insures which adds more protection, although under specific circumstances. It doesn't protect against loss of market value of securities for sure though.

The bottom line in all of this, is we must not be tempted as so many companies, including E-Trade were, to get into risky markets that are potentially able to bring our companies down. Many companies and CEOs weren't able to properly evaluate, identify and manage the risks they opened themselves up to.

Don't do something simply because your competitors are. If you do, the next "opportunity" could be your last.