Skip to main content

Markets

Study: Margin Trading Causes Stock Prices to Drop in Concert

During financial crises, stocks tend to fall together more than they should. A new study co-authored by Yale SOM’s Heather Tookes suggests that margin trading plays a substantial role in driving this downward spiral.

Mumbai's BSE stock exchange on March 9, 2020, as the COVID-19 pandemic sparked a plunge in stock prices. Photo: Dhiraj Singh/Bloomberg via Getty Images.