Margin debt hits another record high

FINRA data show that debit balances in customers’ securities margin accounts continue to climb. After breaking above the $1.0 trillion threshold in June, margin debt continues to push to record highs, reaching $1.184 trillion in October.

The late-2021 to mid-2025 cup-and-handle pattern argues that this uptrend may not be over. Based on the pattern’s measured move, margin debt could rise toward roughly $1.260 trillion.

Chart 1: FINRA margin debt

Higher highs for margin debt have confirmed the cyclical bull market for the S&P 500 from late 2022 into the October 2025 peak.

While elevated leverage is often viewed as a sign of speculative excess, history shows that rising margin debt typically supports—not hinders—bullish market trends. A notable example occurred from 2013 to 2018, when both margin debt and the S&P 500 marched to new highs together.

Our concern would increase if leverage began to unwind while the S&P 500 continued to advance. This type of divergence has preceded major market peaks, including those in 2000, 2007, 2018, 2019, and late 2021.

There are exceptions: a divergence developed in 2011–2012 but did not lead to a meaningful drawdown. Nonetheless, sustained divergences between margin debt and the S&P 500 tend to serve as important caution signals within equity market cycles.

Chart 2: S&P 500 (top) and FINRA margin debt (bottom)