DOW JONES NEWSWIRES
Margin debt edged up 0.9% in December, again climbing to a new
high since the 2008 financial crisis, according to the New York
Stock Exchange.
At the end of December, margin debt totaled $276.6 billion, up
from $274 billion at the end of October and the highest level since
September 2008, according to Big Board data for customers of
NYSE-member securities firms.
Market analysts track margin-debt activity as an indication of
investors' appetite for speculative trading. The activity has risen
nearly every month since early summer.
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 during the financial crisis.
The New York Stock Exchange is part of NYSE Euronext (NYX).
-By Lauren Pollock, Dow Jones Newswires; 212-416-2356;
lauren.pollock@dowjones.com