MONTHYLY INCOME?

[rayray]

(04-15-2021, 10:04 AM)fenders53 Wrote:

(04-15-2021, 09:44 AM)crimsonghost747 Wrote: Don't expect them to be loaned out for months, especially at those rates. Usually you get a day or two at a time, though of course if there are takers (and there seems to be due to the massive interest rate) then they will likely get loaned again very fast. Most of the time the turnover is extremely fast.

There are two catches.
1. The broker is making fortunes out of this. Good thing fidelity is nice enough to give you a part of it. I know that with IB they keep 50% and they give 50% to the owner of the shares.
2. Those shares are covered by a cash collateral, from what I understand it's deposited at the time the loaning happens. So if you loan them out at $100 per share and the share goes up to $120, then you may (check the paperwork) still only have $100 collateral. This shouldn't be an issue unless the shorter goes belly up. Fidelity may or may not be required to step in if this happens and cover the rest so you have your shares, check the paperwork.

I used a similar program for years, though I am currently unsubscribed due to the gamestop situation.

That makes more sense now.  I'd still do it with a small part of my port with a good broker like Fidelity.  They aren't going to allow him to eat it IMO.  What I find the most shocking is shorts think they can pay loan shark rates and win in the end.  Sure they get lucky sometimes.  You don't just need a pullback to win.  You need a crash and you don't have too long to wait for it.  I wonder how much money was lost by fools that missed the TSLA pullback by a year or two?

from what i gather reading the contract is that fidelity will replenish the shares if the borrower goes bk, basically i'd be at risk if fidelity went bk

i called fidelity and asked them a few q's and they said fidelity takes loaning securities very seriously and is not lending out to some mickey mouse outfit and they're in business to make themselves and their clients money not lose it blah blah blah

i know some brokers don't give you a dime, i believe robinhood has it in their agreement that they can loan out your shares

yea, i'd assume the turn around is quick


i remember now shares loaned out for

shorting, voting rights and hedging...i couldn't remember the last one


like a bunch of bookies and shylocks lol