US margin debt reaches record $1.5 trillion — CNBC
Total margin debt in the United States reached a record roughly $1.5 trillion in June. The data cover both institutional and retail investors, CNBC reports, citing the Financial Industry Regulatory Authority. Margin trading involves borrowing funds from a broker to buy securities using existing assets as collateral.
Borrowing is also rising noticeably on the Robinhood platform: its margin portfolio reached a record $21.6 billion in the second quarter. This is 127% more than a year earlier and 332% above the $5 billion recorded in the second quarter of 2024. To use margin on the platform, a client must have a portfolio worth at least $2,000.
Leverage risks
Sam Huszczo, chief investment officer at SGH Wealth Management, believes that the market’s prolonged growth and repeated record highs affect investor psychology. At the same time, he noted that rising margin debt and the popularity of risky assets, including leveraged ETFs, make the financial system more vulnerable.
According to Fundstrat Global Advisors, since 1960, in five out of six cases when monthly margin debt rose by more than 45% year over year, the stock market subsequently declined. In June, the growth rate of margin debt was 49% year over year, although the S&P 500 index had gained more than 13% since the beginning of 2026.
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Fundstrat economist Hardika Singh stressed that margin debt does not necessarily cause the S&P 500 to fall, but when leverage is substantial, it can amplify an existing downturn. According to her, investors may be forced to close positions as prices decline, increasing volatility.
A bet on Tesla
One such investor is 29-year-old engineering consultant Hai Luu from Houston. He began using margin loans to invest in Tesla in 2021, and about a year later his debt exceeded $100,000. In June, Luu exercised five Tesla call options worth $165,000 and bought 500 shares at $330 each, after which his borrowings, taking into account the funds in his account, exceeded $156,000.
When Tesla shares fell sharply in 2022, the investor feared a margin call — a broker’s demand to deposit additional funds or sell assets. According to him, he refinanced the house where he lives with his mother in Houston and directed an additional $30,000 toward reducing his margin debt. Luu acknowledges that his strategy is risky and does not advise others to repeat it.
