Schwab Earnings: Margin Debt Hit a Record High

By Stock Titan Editorial Team Published October 15, 2026, 08:01 AM EDT

Schwab clients now owe $225 billion against their accounts

Schwab’s clients owed about $225.2 billion against their investment accounts at the end of September 2026, which is $187.9 billion of margin loans plus $37.3 billion of Pledged Asset Line balances, both taken from the October 15 release. A year earlier the same two lines added up to about $120.6 billion ($97.2 billion of margin and $23.4 billion of pledged asset lines, the second figure from the September 2025 quarterly report), so the total rose by roughly 87% in twelve months.

Margin loans did most of the climbing. The month-end balance rose every single month in the table Schwab publishes with its results, from $97.2 billion in September 2025 to $187.9 billion in September 2026, an increase of 93%, and the quarter alone added 14%. For scale, Schwab’s quarter-end margin balance was $87.4 billion at the end of 2021 according to its fourth quarter 2021 release, the high point of the last borrowing boom, and it fell to $63.1 billion a year later as markets dropped, per the fourth quarter 2022 release.

Show the data

Category	Value
Sep 2025	$97.2B
Oct 2025	$105.6B
Nov 2025	$110.1B
Dec 2025	$112.3B
Jan 2026	$116.3B
Feb 2026	$120.6B
Mar 2026	$126.7B
Apr 2026	$136.0B
May 2026	$154.6B
Jun 2026	$165.1B
Jul 2026	$169.9B
Aug 2026	$177.6B
Sep 2026	$187.9B

The size of the client base matters for reading those numbers. Schwab looks after $13.33 trillion of client assets, so the $225.2 billion comes to about 1.7% of everything its clients hold there, up from about 1.0% a year earlier (our arithmetic, using $11.59 trillion of client assets at September 2025 from the same release). A share of total assets tells you how big the lending is next to the deposits and portfolios Schwab holds, and it says nothing about any one borrower.

A third of the margin balance is advisers’ long/short trades

About a third of Schwab’s margin balance belongs to a specific kind of strategy run for clients of independent advisers, and that part explains most of this year’s jump. The release says margin loans of $187.9 billion include “$60.7 billion related to long/short strategies,” and a footnote describes them as “long/short strategies utilized by RIAs,” the registered investment advisers who keep their clients’ accounts at Schwab.

In a long/short strategy the account borrows to buy one set of stocks and at the same time sells short another set, so a large loan sits next to a large pile of cash from the short sales. Schwab’s release puts the matching short credits at $63.3 billion for September. Because Schwab earns “a fixed net yield” on these balances, it leaves them out of its interest-earning assets.

Show the data

Part	Value	Squares
Margin loans excluding long/short	$56.48	56
Advisers’ long/short strategies	$26.95	27
Pledged asset lines	$16.57	17

Take the disclosed long/short loans out and the growth looks much slower. Margin loans excluding those balances came to about $127.2 billion at the end of September, against $123.0 billion at the end of June and $102.7 billion at the end of 2025, using the long/short amounts Schwab disclosed in its second quarter 2026 release ($42.1 billion) and its fourth quarter 2025 release ($9.6 billion). That is 3.4% growth in the quarter and 24% since December.

Schwab’s disclosures do not measure how much market risk the long/short strategies carry, so the slower growth of the rest says nothing about the risk of either part. The long/short book, by our count, supplied about four fifths of the $22.8 billion the margin total added between June and September.

Pledged asset line vs margin loan

A margin loan and a pledged asset line both use a portfolio as collateral, but they come from different parts of the company and do different jobs. A margin loan comes from the brokerage and is mostly used to buy more securities in the same account. Schwab’s 2025 annual report defines a Pledged Asset Line as “a non-purpose revolving line of credit from a banking subsidiary secured by eligible assets held in a separate pledged brokerage account,” and non-purpose means the money cannot be used to buy securities. The money goes to other needs while the stocks underneath stay invested, so the borrower avoids selling them.

That second kind of borrowing is growing fast inside Schwab Bank. Pledged asset lines went from $23.4 billion to $37.3 billion in a year, and by September they made up 51.6% of Schwab’s $72.3 billion of bank loans (net, at month end), up from 43.6% a year earlier, by our arithmetic from the quarterly reports and the release. Of the $18.7 billion the bank’s loan book added over those twelve months, pledged asset lines supplied about three quarters.

Show the data

Category	Pledged asset lines	Other bank loans
Sep 2025	$23.4B	$30.2B
Dec 2025	$26.6B	$31.4B
Mar 2026	$28.8B	$32.1B
Jun 2026	$33.4B	$33.6B
Sep 2026	$37.3B	$35.0B

The lines have been safe for Schwab so far. Its June 2026 quarterly report states that “All PALs were fully collateralized by securities with fair values in excess of borrowings as of June 30, 2026 and December 31, 2025, and no allowance for credit losses for PALs as of those dates was required,” and only $20 million of the $33.4 billion was past due or not accruing interest at that date. Those statements cover June; the September report is not out yet.

Schwab also sees room for more. A slide in its July 2026 business update puts its bank loans at 0.5% of client assets at the end of 2025, against an average of 4% for the wealth businesses of selected peers, and it lists “Expanded Pledged Asset Line Eligibility” among its investments. Even after a year of 59% growth, pledged asset lines are about 0.28% of the $13.33 trillion Schwab holds for clients.

One difference between the two products matters for the market-wide numbers in the next section. FINRA’s margin statistics count debit balances in customers’ securities margin accounts at brokerage firms, and a pledged asset line is a loan from a bank, so the $37.3 billion at Schwab, and similar lines at other banks, sit outside FINRA’s total. FINRA’s series counts debit balances in securities margin accounts at member firms, so bank loans such as pledged asset lines are not in it.

Is margin debt at an all time high?

Yes in dollars, with one caveat about timing. FINRA’s margin statistics show debit balances in customers’ securities margin accounts of $1,502 billion at the end of June 2026, the highest monthly reading in the series FINRA publishes, which starts in January 1997. July came in at $1,417 billion and August at $1,454 billion, 3.2% below the June peak, and the September number is due in the third week of October, the usual timing FINRA states on its page.

Show the data

Category	Yearly high, margin debt	Note
1997	$135B
1998	$161B
1999	$242B
2000	$300B	Peak in March, $300B
2001	$209B
2002	$161B
2003	$183B
2004	$218B
2005	$245B
2006	$303B
2007	$416B	Peak in July, $416B
2008	$377B
2009	$265B
2010	$314B
2011	$361B
2012	$355B
2013	$479B
2014	$504B
2015	$550B
2016	$541B
2017	$643B
2018	$669B
2019	$602B
2020	$778B
2021	$936B	Peak in October, $936B
2022	$835B
2023	$710B
2024	$899B
2025	$1,226B
2026	$1,502B	Record in June, $1,502B

The earlier peaks look small next to today’s: $300 billion in March 2000, $416 billion in July 2007 and $936 billion in October 2021. June’s reading is five times the 2000 peak and 1.6 times the 2021 peak. Schwab’s own $165.1 billion at the end of June was about 11% of FINRA’s June total, though the two figures are compiled on different bases and the comparison only gives an order of magnitude.

Dollar records like these come along regularly, because the market and the economy both grow over time and so does the money people borrow against them, so comparing the borrowing with equity values and with GDP puts those records in context.

Margin debt against stock values and the economy

Against the Federal Reserve’s broad measure of corporate equity value, margin debt sits above about half of its past readings; against the size of the economy, it is at a record. We divided FINRA’s quarter-end debit balances by the market value of corporate equities in the Federal Reserve’s Financial Accounts of the United States, and separately by nominal gross domestic product from the Bureau of Economic Analysis, for every quarter end from 1997 to the second quarter of 2026.

On the first measure, June 2026 comes out at 1.21%, which matches September 2021 almost exactly and sits below March 2000 (1.43%) and June 2007 (1.51%). Of the 117 earlier quarter ends, 64 were lower and 53 were higher, although at two decimals two of the lower ones also read 1.21%. The highest reading of all, 1.67% in September 2008, came as stock values fell while margin debt barely changed, which is a reminder that this ratio can jump when markets drop, not only when borrowing grows.

Show the data

Item	Value
1997 Q1	1.03%
1997 Q2	1.01%
1997 Q3	1.03%
1997 Q4	1.01%
1998 Q1	0.99%
1998 Q2	1.02%
1998 Q3	1.09%
1998 Q4	0.93%
1999 Q1	1.02%
1999 Q2	1.06%
1999 Q3	1.13%
1999 Q4	1.21%
2000 Q1	1.43%
2000 Q2	1.31%
2000 Q3	1.34%
2000 Q4	1.15%
2001 Q1	1.08%
2001 Q2	1.04%
2001 Q3	1.08%
2001 Q4	0.98%
2002 Q1	0.97%
2002 Q2	1.04%
2002 Q3	1.10%
2002 Q4	1.06%
2003 Q1	1.13%
2003 Q2	1.14%
2003 Q3	1.11%
2003 Q4	1.05%
2004 Q1	1.06%
2004 Q2	1.07%
2004 Q3	1.08%
2004 Q4	1.10%
2005 Q1	1.15%
2005 Q2	1.11%
2005 Q3	1.16%
2005 Q4	1.13%
2006 Q1	1.12%
2006 Q2	1.12%
2006 Q3	1.13%
2006 Q4	1.21%
2007 Q1	1.23%
2007 Q2	1.51%
2007 Q3	1.31%
2007 Q4	1.35%
2008 Q1	1.45%
2008 Q2	1.49%
2008 Q3	1.67%
2008 Q4	1.28%
2009 Q1	1.39%
2009 Q2	1.26%
2009 Q3	1.26%
2009 Q4	1.25%
2010 Q1	1.26%
2010 Q2	1.32%
2010 Q3	1.30%
2010 Q4	1.28%
2011 Q1	1.37%
2011 Q2	1.34%
2011 Q3	1.37%
2011 Q4	1.28%
2012 Q1	1.25%
2012 Q2	1.26%
2012 Q3	1.26%
2012 Q4	1.36%
2013 Q1	1.40%
2013 Q2	1.39%
2013 Q3	1.39%
2013 Q4	1.42%
2014 Q1	1.41%
2014 Q2	1.39%
2014 Q3	1.40%
2014 Q4	1.34%
2015 Q1	1.37%
2015 Q2	1.45%
2015 Q3	1.44%
2015 Q4	1.40%
2016 Q1	1.34%
2016 Q2	1.32%
2016 Q3	1.41%
2016 Q4	1.35%
2017 Q1	1.40%
2017 Q2	1.37%
2017 Q3	1.37%
2017 Q4	1.37%
2018 Q1	1.39%
2018 Q2	1.37%
2018 Q3	1.31%
2018 Q4	1.30%
2019 Q1	1.19%
2019 Q2	1.20%
2019 Q3	1.12%
2019 Q4	1.09%
2020 Q1	1.15%
2020 Q2	1.16%
2020 Q3	1.19%
2020 Q4	1.22%
2021 Q1	1.20%
2021 Q2	1.19%
2021 Q3	1.22%
2021 Q4	1.14%
2022 Q1	1.06%
2022 Q2	1.08%
2022 Q3	1.10%
2022 Q4	0.95%
2023 Q1	0.95%
2023 Q2	0.95%
2023 Q3	0.98%
2023 Q4	0.91%
2024 Q1	0.94%
2024 Q2	0.95%
2024 Q3	0.89%
2024 Q4	0.97%
2025 Q1	0.98%
2025 Q2	1.03%
2025 Q3	1.07%
2025 Q4	1.13%
2026 Q1	1.15%
2026 Q2	1.21%

On the second measure, margin debt was 4.6% of annual GDP in the second quarter of 2026, higher than in any of the 117 quarters before it, against 3.0% in March 2000 and 3.8% in September 2021. The two readings disagree because stock values have grown faster than the economy, so debt that is modest next to portfolios can still be large next to incomes.

Our reading is that both answers to “is margin debt high right now” are true and that they answer different questions. The share of equity value compares the loans with the Federal Reserve’s measure of all corporate equity, a broad yardstick for borrowing across the market that says nothing about the cushion in any one borrower’s account. The share of GDP says how big the borrowing is next to the size of the economy.

The speed of the rise stands out more than the level

What stands out in 2026 is how quickly borrowing grew, more than where it ended up. FINRA’s total rose 37% between August 2025 and August 2026 (its September figure is not out yet), and Schwab’s margin balance rose 93% between September 2025 and September 2026, while the Federal Reserve raised its policy rate on September 16 to a range of 3.75% to 4%, according to its statement. Schwab’s June quarterly report describes hedging the “variable cash flows” of its margin loans and pledged asset lines, which indicates that the rates on both vary.

The way margin works explains why the pace draws attention. FINRA’s investor guide to margin calls says that under the Federal Reserve’s Regulation T, firms can initially lend a customer up to 50 percent of the purchase price of an eligible stock, and that the account then has to stay above firm and FINRA maintenance requirements.

If account equity falls below those requirements, the broker can ask for more cash or securities, and the same FINRA guide says firms may sell assets without first issuing a margin call or notifying the customer. Whether a fast build-up leaves borrowers closer to those limits depends on how much each account borrowed against what it holds, which no public figure shows. Borrowed money also magnifies gains and losses on the same holdings, which you can see by running a position through a profit and loss calculator twice, with and without borrowed money.

Schwab’s June quarterly report names the same link in its own words: “Equity market valuations may also affect the level of brokerage client trading activity, margin borrowing, and overall client engagement with Schwab.” The collateral is worth what the market says it is worth on the day.

Schwab’s record quarter and where the revenue came from

Net revenue rose 17% from a year earlier to $7,171 million, GAAP earnings were $1.62 a share against $1.26, and the net interest margin, the gap between what Schwab earns on its assets and what it pays for funding, widened to 3.04%. Of the $1,036 million of extra revenue, net interest revenue, which includes what Schwab earns on its loans, supplied $426 million, by our arithmetic from the income statement. Roughly three fifths of that came from a bigger asset base and two fifths from the wider margin, in a split that counts the overlap of the two as margin.

Money kept arriving too. Core net new assets of $190.4 billion were 38% above the third quarter of 2025, and clients opened 1.2 million brokerage accounts, bringing total client accounts to 48.6 million. Trading revenue rose 16% to $1.2 billion as daily average trades climbed 44% from a year earlier to 10.7 million. The Schwab overview page and the Schwab financials page hold the longer record of these figures.

Chief executive Rick Wurster mentioned the borrowing alongside advisory flows in the release: “During the quarter, Pledged Asset Line™ balances grew to $37.3 billion, up 59% year-over-year, while net flows into Schwab Wealth Advisory™ increased 55%.” Schwab also said client sweep cash rose $7.1 billion in the quarter to $492.8 billion, “reflecting continued demand for long/short strategies and organic growth.”

Signals that would show the story turning

A few dates will show whether the borrowing keeps building or starts to come down. FINRA’s September figure, due in the third week of October, will say whether the market-wide total got back above June’s $1.50 trillion. Schwab publishes a monthly activity report in the middle of each month that includes month-end margin balances, so October’s balance will be out in mid November.

The September quarterly report will update the statement that every pledged asset line is fully collateralized, along with past-due amounts, which were $20 million at the end of June. A sharp drop in margin balances during a market decline could reflect forced sales or voluntary repayment, and the totals cannot tell the two apart. The ratio to equity value rises when stock values fall faster than the loans, as in the third quarter of 2008, or when loans grow faster than stock values, as in 2025 and 2026, and it fell in the fourth quarter of 2008 when balances were cut by about 39%.

Our article on credit card defaults at JPMorgan and Wells Fargo follows the household borrowing that does not involve a portfolio, and our guide to leveraged ETFs explains another way investors amplify their bets that never shows up as a margin loan.

Method and data behind our calculations

Schwab’s figures come from its October 15, 2026 release, including the monthly activity table at the end of it, and from its quarterly reports and earlier releases filed with the SEC. The combined borrowing figure adds quarter-end margin loans and pledged asset line balances. The year-earlier pledged asset line balance of $23,390 million comes from the September 2025 quarterly report, and the release’s 59% growth rate checks out against it.

For the market-wide ratios we used FINRA’s monthly debit balances at each calendar quarter end, from its historical data file, divided by the Federal Reserve’s quarter-end market value of corporate equities held by all sectors (series BOGZ1LM893064105Q, quarterly data) and by nominal GDP at a seasonally adjusted annual rate (quarterly data). That gives 118 quarter ends from March 1997 to June 2026. The 2007 and 2021 peaks in the table are the quarter ends nearest the FINRA monthly highs of July 2007 and October 2021.

Frequently asked questions

The information provided in this article is for educational and informational purposes only. It does not constitute financial advice, investment recommendation, or an endorsement of any particular investment strategy. Past performance does not guarantee future results. Investors should conduct their own research and consult with a qualified financial advisor before making investment decisions.

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