Margin debt rose further in September, according to the New York
Stock Exchange, continuing to rebound along with the equities
market from the lowest levels in years early this year.
At the end of September, margin debt was up 6.8% from August to
$220.79 billion, according to Big Board data for customers of
NYSE-member securities firms. The figure got as low as $173.3
billion at the end of February, the smallest level since the end of
2003.
Market analysts track margin-debt activity as an indication of
investors' appetite for speculative trading.
A potential pitfall for those trading "on margin" is a sharp
decline in stock prices, which can expose investors to margin
calls, requiring them to post additional collateral lest their
brokers sell their securities to cover the debt. A wave of margin
calls can worsen selling pressure on stocks and was seen as partly
to blame for the market's woes last fall and winter.
-By Kevin Kingsbury, Dow Jones Newswires; 212-416-2354;
kevin.kingsbury@dowjones.com