Chart of the Week: NYSE Member Firms’ Client Margin

Tuesday, April 19, 2005 | 12:23 PM

e last addressed Margin debt back in September 2003. At that time, we noted that margin was only modest, and represented little danger to the market. As the chart below shows, Margin has scaled up significantly. At present, while Margin debt is 20% below its 2000 peak, it’s the highest it has been since early ‘01.

NYSE Member Firms’ Client Margin
click for larger chart

Margin_march_05

Source: NYSE

It is at the greatest spread relative to the Nasdaq since the last time we last addressed the issue. Margin debt holds the additional risk of “forced selling” into any further weakness. As we saw post-2000, the daily liquidations exacerbated the downward movement as the markets collapsed.


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Tuesday, April 19, 2005 | 12:23 PM | Permalink | Comments (0) | TrackBack (0)
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