Loading ...Margin debt as tracked by FINRA at its member firms isn’t the only form of stock market leverage, but it’s the only form that is disclosed monthly. There are many other forms of stock market leverage by institutions and individuals that are not disclosed, or are only disclosed voluntarily in SEC filings by the brokers and banks that lend to their clients against their portfolios, such as “securities-based loans” (SBLs). We don’t know how much total stock market leverage there is, but margin loans indicate the trends, and we had another WTF moment:
High margin balances tend to precede epic stock market sell-offs, as annotated in the chart above.
