Margin debt is the dollar value of securities purchased on margin within an account. FINRA publishes end-of-month data for margin debt on the FINRA Margin Statistics page.

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On GuerillaStockTrading we track the margin debt as it is released each month, plotting a 10 month MA line (gold line) which serves as a bullish or bearish signal line.

The price of oil has a big impact on the level of margin debt on the NYSE as oil is used to secure a lot of margin buying power, especially from world’s largest sovereign wealth funds.

Knowing the dollar amount of margin traders are willing to borrow to purchase securities on the NYSE gives a key insight into the mass psychology of traders. Traders will only borrow money to buy stocks if they believe strongly that a stock will go higher because they have to pay interest on the money borrowed.

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