"This Week Will Be Bad" - Margin Calls Mean More Pain To Come

[Hotler]

This week, we will probably see more pain as the margin calls roll in. Or as it is often called, leveraged positions get unwound.

https://www.zerohedge.com/news/2018-10-11/week-will-be-bad-margin-calls-mean-more-pain-come

[still_one]

1. Anyone who is trading on margin should know the risks. What may offset some of it will be shorts

covering, and I suspect the bulk of that will be done by the big players

[crankyoldguy]

2. Normal correction

A little overdue, but no reason for panic. When the market has been running so hot for so long, people start expecting a pullback and their finger gets itchy on the trigger to lock in their gains. The people crediting the market to Trump (or for that matter to Obama) are projecting their political biases onto a mechanism that doesn't care. It's 50% driven by math, and 50% by human nature, greed and paranoia. As soon as the black boxes quit selling, the pigs will be back at the trough.

[at140]

4. you get it!

Isn't October Halloween month?

[PoindexterOglethorpe]

3. Also, the amount of margin this days is relatively low.

The most you can borrow (the margin) is 50%. Back in the 1920's you could buy on 90% margin, meaning you only put up 10% of the price, borrowing the rest. And that's a huge reason why the crash was so severe and why so many average people who'd been persuaded to buy on margin then lost everything.

Yeah, this will hurt those buying on margin, but that's a relatively low percentage of the stock buyers and owners.

[at140]

5. Margin was 50% during 2000 crash, 1987 crash

so that may not be the reason.

[PoindexterOglethorpe]

7. I think we are agreeing that margin buying

isn't a factor here. Plus, as I post this, the Dow is up 170 points from yesterday.

[Hugin]

6. I've been noticing a linkage between these market dips and weakness in cryptocurrencies.

A major fall in their value seems to precede or be concurrent with a large correction in the overall markets.

Is anyone tracking this?