Margin calls fell in the December quarter but the worst is yet to come.
The latest statistics from the Reserve Bank of Australia show that that the average number of margin calls per day per 1000 clients was 0.79, down from 1.04 in the September quarter.
The September quarter numbers were the highest since December 2004 as the market fell in the wake of the sub-prime crisis.
Since the end of the December quarter the Australian market recorded 14 successive sessions of decline during January.
Colonial Geared Investments head of investment lending John Clothier said he is expecting a significant worsening for the market in the March quarter.
"I suggest that March numbers will be record breaking in terms of absolute numbers of margin calls for the industry," he said.
Colonial Geared Investments recorded 800 margin calls, or around 2 per cent of its 38,000 clients in January.
"The only people that have got into significant trouble in January are those people who had only recently just got into the market, or tended to have a highly skewed portfolio, potentially concentrated in one stock, Clothier said.
"When you look at our book the loan to value ratio is still about 38-39 per cent."
By the end of the December quarter, margin lending loans in the Australian market totalled $37.77 billion.
