Margin debt in the US has skyrocketed to a record $1.3 trillion in April, marking a +53% increase compared to last year, as the surge in stock valuations and relentless market momentum spurred aggressive leverage accumulation by traders.
Net margin debt, which measures how much traders have borrowed to buy stocks beyond their available cash, has risen to about 50% of total client balances, nearing historical highs.
In relation to the overall market capitalization of the US stock market, margin debt now stands at approximately 1.3%, also close to record levels.
Both metrics now EXCEED the levels observed at the peak of the dot-com bubble in 2000.
Historically rapid expansions in margin borrowing have coincided with periods of peak market optimism and often preceded sharp corrections.
Traders have rarely been this heavily leveraged in history.
Net margin debt, which measures how much traders have borrowed to buy stocks beyond their available cash, has risen to about 50% of total client balances, nearing historical highs.
In relation to the overall market capitalization of the US stock market, margin debt now stands at approximately 1.3%, also close to record levels.
Both metrics now EXCEED the levels observed at the peak of the dot-com bubble in 2000.
Historically rapid expansions in margin borrowing have coincided with periods of peak market optimism and often preceded sharp corrections.
Traders have rarely been this heavily leveraged in history.