Okay, for a very long time brokerages made money by lending shares, sometimes "your shares" to short sellers making a nice profit in the process. Your shares were not at risk, so they said, right? Safe until not, I suppose?
Alright, I got a notice from Fidelity that I can earn monthly income from popular owned equities by lending them out to short sellers. A) I still own my share B) I can still sell my shares while out on loan. What's the catch? I'm getting the package in the mail so I can look at it in more detail--I know--in this day and age but it's the way they're doing it.
Transparency or someone else already doing it--I'm assuming this info came to light after the Robinhood fiasco.
Interesting though? The catch is maybe they're passing the risk from themselves the broker to the client, who knows?
Thoughts??
Interesting and always felt that the client should have been getting extra interest if they're shares were "out to loan" to short sellers by their broker.
Alright, I got a notice from Fidelity that I can earn monthly income from popular owned equities by lending them out to short sellers. A) I still own my share B) I can still sell my shares while out on loan. What's the catch? I'm getting the package in the mail so I can look at it in more detail--I know--in this day and age but it's the way they're doing it.
Transparency or someone else already doing it--I'm assuming this info came to light after the Robinhood fiasco.
Interesting though? The catch is maybe they're passing the risk from themselves the broker to the client, who knows?
Thoughts??
Interesting and always felt that the client should have been getting extra interest if they're shares were "out to loan" to short sellers by their broker.