Flows & Liquidity: The need for deleveraging

Research evidence excerpt

Flows & Liquidity: The need for deleveraging

J P M O R G A N Global Markets Strategy

15 July 2026

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Flows & Liquidity

The need for deleveraging

Global Markets Strategy

Nikolaos Panigirtzoglou AC

• The investor deleveraging phase that started in June appears to be still (44-20) 7134-7815

ongoing and we see more room for deleveraging in leveraged equity ETFs, nikolaos.panigirtzoglou@jpmorgan.com

options and margin accounts, thus acting as a headwind for equities going J.P. Morgan Securities plc

forward. Mika Inkinen

• The excessive growth of leveraged equity ETFs can be self-correcting: if (44-20)mika.j.inkinen@jpmorgan.com7742 6565

excess leverage creates higher frequency of VaR shocks, a volatile range- J.P. Morgan Securities plc

trading in equities would over time shrink the AUM of leveraged equity Mayur Yeole

ETFs. (91 22) 6157 3872

• That said, it will perhaps take another three months or so of volatile range- mayur.yeole@jpmchase.comJ.P. Morgan India Private Limited

trading in equities until the leveraged equity ETF AUM ratios to the

Krutik P Mehta

market cap of underlying stocks return to pre-April levels for either

(91-22) 6157-5016

memory stocks or all equity ETFs. krutik.mehta@jpmchase.com

• Once this deleveraging abates, longer-term equity demand/supply J.P. Morgan India Private Limited

dynamics should provide a support.

• Some encouraging signs from bitcoin futures. Cross Asset Positioning Monitor

Current level shows the latest percentile, Min is