04-16-2021, 10:41 AM
Maybe another point worth adding.
While I had this program active, and got 50% of the interest the broker was getting from the shorters, it still never generated any meaningful income. Some income yes, but not much. As I said the turnover is fast, usually the interest rates are quite low, and only the crazy risky/momo stocks get loaned anyway.
It really depends on what you have in your portfolio and what shorters want to short. In 2017 and 2018 I was getting double/triple/quadruple what I was getting in 2020, with a portfolio probably 50% smaller. All because I had UI and people were paying crazy money to short it. (that didn't end well for them).
In 2019 and 2020 the yield from this program was (for the full year) less than 1% of portfolio value. So if you have a pretty steady portfolio where the majority is things like JNJ, PEP, LMT etc, then don't expect much. That being said, just having one crazy momo stock in the mix can generate quite a bit of income from this for a short while.
While I had this program active, and got 50% of the interest the broker was getting from the shorters, it still never generated any meaningful income. Some income yes, but not much. As I said the turnover is fast, usually the interest rates are quite low, and only the crazy risky/momo stocks get loaned anyway.
It really depends on what you have in your portfolio and what shorters want to short. In 2017 and 2018 I was getting double/triple/quadruple what I was getting in 2020, with a portfolio probably 50% smaller. All because I had UI and people were paying crazy money to short it. (that didn't end well for them).
In 2019 and 2020 the yield from this program was (for the full year) less than 1% of portfolio value. So if you have a pretty steady portfolio where the majority is things like JNJ, PEP, LMT etc, then don't expect much. That being said, just having one crazy momo stock in the mix can generate quite a bit of income from this for a short while.