Margin debt now stands at a record of more than $1.1 trillion, up nearly 40% on an annual basis. In recent years, not only has margin debt surged, but the “cost of carrying” that debt has also risen.

Margin debt has surged to a record $1.2 trillion, growing 45% y/y while the S&P rises at a slower 20% y/y pace. Investor leverage, measured by the margin debt to free credit balances ratio, has ...