In the beginning of the year, total margin debt hit all time high at $960 billion but it's dropped significantly since then to the current level of $680 billion, a haircut of almost 1/3, which brings us to same margin debt levels at 2015/2016 in real terms or 2013 levels after accounting for inflation.
When you look at margin debt to stock index ratio, you get an even more dramatic picture because the ratio is at the same level as it was at the bottom of March 2020 correction when huge chunks of margin debt was wiped off due to forced liquidations and massive amounts of stock selling by brokers.
Year-over-year change in margin debt is pointing at the biggest decline since 2009 crash as it dropped $200 billion from a year ago which is about the same as what we saw in 2009.
Source: https://www.yardeni.com/pub/stmkteqmardebt.pdf
This would indicate that market has sustained a lot of margin calls and significant amount of deleveraging already happened. Moving forward, this would typically be a positive development because margin debt tends to bottom around the same time as market bottoming just like it tops at the around the same time as market topping. Having less margin debt also means less leverage which would make future sell offs less drastic compared to what we saw in the last several months.
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