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One comment re:
2)- Margin debt is out of sight.
Margin Debt as a % of market value remains under 2%, hardly a factor in
macro level market moving impulses.
At the micro level, and in the short term, margin call related selling does
cause
a/ momentum based funds to "pile on" and creates its own momentum.
b/ stock-specific volatility as undercapitalized accounts close out
positions and well capitalized accounts use that to quickly add positions.
Data on margin debt can be found here:
http://www.nyse.com/pdfs/margin.pdf
This is indicative, if not inclusive, of non-NYSE firms.
Regards
Gitanshu
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