Big moves in a handful of stocks provided traders with a worrying signal—an "ultra-high" level of leverage in the stock market, veteran trader Art Cashin told CNBC on Wednesday. The trend could mean more volatility going forward, he added.
Cashin said he saw a dozen stocks make 7 to 8 percent moves on Tuesday without any specific headlines to justify those swings. That left traders curious, and Cashin said they settled on high levels of leverage as a culprit behind the moves.
"People must be three or four times normal leverage," Cashin said. "We've seen margin accounts go up. We knew the hedge funds were playing. But to see extreme moves like that on nonspecific news tells me there's a lot of leverage out there. ... If we start to get a protracted move, it could get very volatile."