By James Langton

(December 13 – 09:15 ET) – New data from the Investment Dealers Association reveals that investors scaled back their borrowing sharply in October.

The latest numbers from the IDA put client margin debt at $10.6 billion at the end of October, down from a high of $11.9 billion at the end of September. In October, the TSE 300, led by Nortel Networks, experienced a meltdown losing 800 points. In the wake of this slide it appears that investors cut their leverage exposure dramatically.

The October numbers show that client margin exposure has returned to levels it hasn’t seen since the end of June, when the debt level was reported at $9.8 billion. Margin debt climbed to almost $10.9 billion by the end of July, and continued to rise through the summer, until the market knocked the wind out of this strategy.