As the market falls, their portfolio value falls while the loan amount remains constant, increasing leverage. All levered positions must either sell into correc

As the market falls, their portfolio value falls while the loan amount remains constant, increasing leverage. All levered positions must either sell into corrections or let their leverage increase to unacceptable levels. And at some point, the folks lending you money will have the right to call in the loans you took to buy securities. This automatic buy high / sell low effect is why people like using less leverage in more volatile markets. When volatility is high enough, it starts becoming advantageous to hold cash to buy the dip / sell the peak. The breakeven point between "more money in the market" and "volatility cleans out my position" can be calculated with the Kelley Criterion.