US Margin Debt Hits 1.5 Trillion as Investors Increase Risk

Borrowing to buy stocks has reached unprecedented levels in the United States, with total margin debt climbing to approximately $1.5 trillion in June 2026. Data from the Financial Industry Regulatory Authority (FINRA), cited by CNBC, show growing leverage among institutional and retail investors as rising share prices encourage traders to expand their positions.

Robinhood's outstanding margin balances reached a record $21.6 billion in the second quarter of 2026, up 127% from $9.5 billion a year earlier and 332% from $5 billion in the second quarter of 2024, according to CNBC and Crypto Briefing. By the end of August 2026, the balance had eased slightly to $21.5 billion, remaining 72% above its year-earlier level, Crypto Briefing reported.

Margin investing allows customers to borrow from brokerage firms to purchase securities, using existing investments as collateral. While leverage can magnify profits when prices rise, falling asset values can trigger demands for additional funds or forced sales that compound losses.

Research cited by UA.News from Fundstrat Global Advisors found that the stock market declined after five of six instances since 1960 in which monthly margin debt increased by more than 45% year over year. Margin debt grew 49% annually in June 2026, while the S&P 500 had gained more than 13% since the beginning of the year.

Fundstrat economist Hardika Singh cautioned that rising margin debt does not automatically cause stock market declines. However, substantial leverage can intensify an existing downturn as investors close positions when prices fall, potentially increasing market volatility, according to UA.News.

Houston engineering consultant Hy Luu illustrates how individual investors are using borrowed money to expand their stock holdings. The 29-year-old began investing on margin in Tesla in 2021, accumulating more than $100,000 in margin debt about a year later as the stock advanced.

Luu described how rising share prices influenced his early decisions in an interview with CNBC.

"I went really crazy," Luu said. "The stock was going up, and so I was like, 'There's no way I could lose.'"

During Tesla's sharp decline in 2022, Luu worried that further losses could trigger a margin call. According to UA.News, he refinanced the house he shares with his mother, Kim Nguyen, in Houston, directing an additional $30,000 toward reducing his margin balance.

In June 2026, Luu exercised five Tesla call options worth $165,000 and purchased 500 shares at $330 each. After accounting for the cash in his account, his margin borrowing exceeded $156,000, according to CNBC.

Despite the risks, Luu said his investments, company stock and 401(k), after subtracting margin and other debts, had helped lift his net worth from negative territory seven years earlier to more than $800,000.

"I'm very close to becoming a millionaire," Luu said. "What I'm doing is risky. I don't recommend anyone do it."

Devin Ryan, head of financial technology research at Citizens, attributed part of the borrowing trend to brokerage firms' efforts to attract highly active customers and make investing easier through mobile applications.

Ryan described the commercial appeal of customers who frequently trade using borrowed funds.

"Robinhood has made a really concerted effort to go after customers that are actively using margin because they're the most active traders," Ryan said.

He also pointed to the company's promotional offers and pricing as factors relevant to its customer acquisition strategy.

"If you look at the offers that Robinhood has had in the market over the past couple of years, it's been targeting those customers with obviously transfer bonuses, but also very low margin rates, very high yields on their cash," Ryan said.

Ryan said the convenience of mobile trading also contributes to greater access to investing.

"Having very little friction in investing and having everything at your fingertips, and then having a really seamless mobile experience where it's not clunky, I think, plays a big part of that," Ryan said.

A Robinhood spokesperson disputed the suggestion that the company specifically targets margin traders through promotional offers.

"We don't believe it's accurate to characterize" its promotions as targeting "active traders who are trading on margin or may trade on margin," the spokesperson said.

The company also rejected the claim that its products encourage excessive risk-taking.

"Meet users where they are," the spokesperson said, adding that the company would "reject any implication" that it encourages risky trading.

Sam Huszczo, chief investment officer at SGH Wealth Management, said prolonged market gains can influence investor behavior and encourage excessive risk-taking in some parts of the market.

"That's greed," Huszczo said, while noting that the behavior was "not everywhere" but was "certainly creeping into pockets."

Huszczo warned that margin borrowing represents only one part of the broader risks associated with increasingly leveraged investing.

"Margin, that's only the tip of the iceberg of what we can see," he said. "Fear of missing out is just the emotion of jealousy with a brokerage account."

Although Huszczo characterized the broader market as "way healthier" than some observers believe, he acknowledged that rising margin debt and the growing use of risky assets, including leveraged exchange-traded funds, could increase financial vulnerability.

He emphasized the importance of distinguishing between investments supported by underlying growth and speculative buying driven by momentum.

"People need to differentiate between what's a legitimate momentum growth investment and what's reckless chasing," Huszczo said.