American investors are borrowing money to buy stocks at a pace not seen in nearly three decades. US margin debt reached a record $1.4 trillion in May 2026, a 54% jump from the same period last year, according to FINRA data. Investors added roughly half a trillion dollars in borrowed money to their stock market bets in just twelve months.
The leverage machine is running hot
The month-over-month numbers are just as striking. Margin debt grew 8.5% from April to May 2026 alone.
A major driver of this leverage surge is the explosive growth of leveraged exchange-traded funds. These products amplify daily returns by 2x or 3x. On June 5, 2026, a 3x leveraged semiconductor ETF dropped 31% in a single trading session.
Aggressive options trading is compounding the risk. The combination of leveraged ETFs and options creates layers of synthetic exposure that can amplify volatility in both directions.
