You can buy (and sell) options to limit the impact of that volatility.
But I'm not sure why you would want to encourage margining when you are against volatility? The capital for the margin loan has to come from somewhere too.
So instead of person A putting up 5$ and borrowing 95$ to own 100$ in stock, and person B lending those 95$; it might be better for volatility for person A to own 5$ in stock and B to own 95$ in stock?
I am not sure.
For full disclosure: my investment strategy involves margining.
(Btw, I do think that 5% equity on houses is bad. It's mostly a function of land prices going up so much.)
But I'm not sure why you would want to encourage margining when you are against volatility? The capital for the margin loan has to come from somewhere too.
So instead of person A putting up 5$ and borrowing 95$ to own 100$ in stock, and person B lending those 95$; it might be better for volatility for person A to own 5$ in stock and B to own 95$ in stock?
I am not sure.
For full disclosure: my investment strategy involves margining.
(Btw, I do think that 5% equity on houses is bad. It's mostly a function of land prices going up so much.)