China Traders Who Loved Leverage Left Reeling by Friday Rout
- Leveraged wagers jumped 89% among top stocks on CSI 300 Index
- Reckless margin trading risks deep correction: JPMorgan Asset
Photographer: Nicolas Asfouri/AFP via Getty Images
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Margin traders who drove a clutch of stocks to the forefront of a dramatic upswing in Chinese equities now have a tough decision to make.
Friday’s 4 percent plunge in the CSI 300 Index was by far the steepest decline since the rally accelerated just over a month ago, and some of the bull run’s biggest winners were in the crosshairs. That’s a problem, because leveraged wagers on the 20 best-performing stocks in the gauge jumped by an average 89 percent from the start of February through March 5, according to exchange data compiled by Bloomberg. The average increase for the index as a whole was 25 percent.