Yesterday Schwab asked to borrow my Crwd shares and is paying me 7% interest on the shares. I thought this was interesting because someone must be paying a good amount of money to short Crwd.
Andy
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So is there any downside for you to lend out your shares?
Not that I can see. They pay interest for the total amount value of shares they borrowed, this interest is paid daily. They put the shares borrowed into an another IRA account under you and the interest is swept back into your original account on the first day of each month. The interest will fluctuate each day on the price of the stock, Up and down. You can sell the shares at anytime and the interest will then stop. They insure the value of the account and the insurance will fluctuate with the value of the stock.
So I can’t see any downside to this. You have to sign up with your broker to allow your shares to be lent. They will contact you if they want to borrow shares.
Andy
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There is no downside. If your broker is IBKR you might already be participating without knowing it. It was automatic when I signed up. Depending on your balance/share count they might not be borrowing from you and or the interest might be so small you haven’t noticed. Note that all the major ETF issuers engage in this, which is how they are able to offer such low expense ratios, similar to how the brokerages sell your order flow to the dark markets to subsidize the ‘free trades’ that are now standard. There’s no free lunch folks! (Except lending short, that might actually be free or better if the shorts are wrong)
Please respect Saul’s last post…
“PLEASE NO MORE POSTS ON LENDING SECURITES. It’s way off topic for our board.
Thanks
Saul”
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