Leverage Increases For First Time In '12

Oct 8 2012 | 12:09pm ET

Hedge funds are levering up for the first time this year.

Margin debt on the New York Stock Exchange rose 5.4% year-on-year in August, according to Bank of America Merrill Lynch. That benchmark for leverage has dropped for nine straight months.

"Leverage can be used as a sentiment indicator as it is related to investor confidence," BofA, which tracks the use of leverage among investors, including hedge funds, said. "It tends to be correlated to the direction of the equity market—investors are likely to gain confidence and add leverage when the equity market is going up and vice-versa. The current reading shows that investors are becoming more confident in the market, which supports further upside."


In Depth

Bob Doll's Ten Market Predictions For 2016

Jan 7 2016 | 9:37pm ET

Well-known market strategist Robert Doll has published his annual list of ten predictions...

Lifestyle

Citadel's Ken Griffin Donates $40M To New York's Museum of Modern Art

Dec 22 2015 | 9:23pm ET

Citadel founder Ken Griffin has donated $40 million to New York’s Museum of Modern...

Guest Contributor

Hedge Fund Marketing - Making the Most of Your Salesperson

Jan 20 2016 | 8:11pm ET

In this contributed article, Bruce Frumerman of Frumerman & Nemeth takes a close...