Margin debt by month

Discussion in 'Economics' started by gnode, May 23, 2011.

  1. gnode


    Any of you watch this?

    Shows margin debt by month going back a long time. Worth graphing against the market. In the most recent crash, it was preceded by a reduction of margin debt. Margin debt spiked up, then reversed, then market crashed.

    We are now approaching similar levels of margin debt. I am trying tracking this to get an idea of when the next big drop may be.
  2. Margin debt reflects Joe Sixpack 2 to 1 (4 to 1 for a smaller segment).

    70% of transaction volume is insitutional . On the surface, unlevered.

    I don't know about Nasdaq market makers or ECN's but an NYSE specialist can lever 20 to 1 (when he so chooses) under Regs T or U.

    Now that............would be worthwhile info.
  3. Interesting. Thanks for posting this.
  4. You're welcome. Perhaps the essence of my point may have been missed.

    Specialist margin debt isn't dilvulged. Their short activity is divulged with a two week delay. Too late to be of any use. Part of the rig.

    A specialist would lever in accumulation mode. To acquire inventory. In other words the end of a downturn.

    IF he were to go to the extent of 20 to 1, that would be to facilitate the beginning of a large perhaps long move. UP.

    A rare example would be a capitulation (he's absorbing the majority of selling).

    This info is what you would want. This info is what you'll never get.

    I don't want to completely diminish Joe Sixpack. Just to keep it in perspective. Every single share outstanding is held somewhere. The majority is institutional (pensions, mutual funds, ETF's) the remainder market maker inventory and............Joe Sixpack. He's the smallest element of any liquid stock.

    Simply put, people don't play cards with the cards face out.