During March, as the market sold on Iran fears, U.S. margin debt declined by $32 billion to $1.22 trillion, the lowest since November 2025.
The contraction marked the 2nd consecutive monthly decline in margin debt.
Margin debt is now down by $59 billion year to date:
Margin debt declined in February and March, in line with fears over an energy shock and the Iran war, but is still up 39% year-over-year. (Source: VettaFi)
Despite that drop, margin debt is still up $341 billion year over year – a 39% increase. Speculation is alive and well across all sectors of the market.
The last time margin debt increased at this pace? In 2021, right before the bear market that ravaged the indexes in 2022.
Since the 2022 bear market low in October of that year, margin debt has surged by $570 billion, an 87% increase. And a big reason why, over the same timeframe, the S&P 500 has more than doubled.
Leverage and speculation have driven the market to three years of above-average bull market gains.
Looking below the index averages, individual stocks can – and do – pop in this environment, provided they have decent earnings.
A Grey Swan take: with many stocks priced to perfection, a hedge against the trend is also warranted.
For a specific hedge trade right now, check out our Shadow Stock recommendation for paid-up Grey Swan Pro members, right here.
~ Addison
P.S. Today on Grey Swan Live!, Zoltan Istvan joins us to discuss how the accelerating pace of change due to AI is already reshaping every major asset class along the way. And, likewise, how you should be thinking about your money.
Tune in later today (2pm EST/11amPST) as we connect the dots — and show you where the opportunities are moving next.
Zoltan will take time out of his campaign for governor of California to help us dig into…
- Open-source AI is reshaping business.
- And the public is starting to push back on both.
