Story perspectives

Record $220B Repo Hits Dealers as Leverage Spreads Surge

6/29/2026

Summary

Story summary

U.S. primary dealers hold a record $220 billion equity repo exposure, stressing large banks.
Leveraged ETFs have expanded to about $200 billion, driven by technology and semiconductor products.
Financing spreads between S&P 500 total-return futures and SOFR reached record highs since late 2020 after call-option buying surged post-Iran ceasefire, pressuring dealer capacity.
Morgan Stanley strategist Martin Tobias warns financing costs may curb leveraged trades as the S&P 500 hovers near its June 2 high of 7,621.

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Story summary

U.S. primary dealers hold a record $220 billion equity repo exposure, stressing large banks.
Leveraged ETFs have expanded to about $200 billion, driven by technology and semiconductor products.
Financing spreads between S&P 500 total-return futures and SOFR reached record highs since late 2020 after call-option buying surged post-Iran ceasefire, pressuring dealer capacity.
Morgan Stanley strategist Martin Tobias warns financing costs may curb leveraged trades as the S&P 500 hovers near its June 2 high of 7,621.