Once bitten, not shy: Investors again seek margin loans as stocks rally

to buy stocks as markets rebound, bankers said, which comes just months after the strategy burned some investors.

Rasiwala said that there were “certain pockets where clients who did not have any additional liquidity to pump in had to liquidate their portfolio.” However, he said that the rebound happened quickly “so clients who had liquidity on the side could support the portfolio for that brief period.” The renewed interest since the market crash is good news for banks, which typically make money from both the loans they give investors and the fees they charge them. But it also shows how risk is increasing in the market even as the coronavirus pandemic continues to wreak havoc on the global economy and new threats to the rally emerge.

Such disputes also rose during the 2007-2009, after the financial crisis, according to FINRA data of cases filed and closed.

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