04-17-2021, 08:55 AM
(04-16-2021, 10:41 AM)crimsonghost747 Wrote: 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.
absolutely, this was my thinking about it, cause, other then a couple of equities here and there my portfolio is very boring.
i'm not looking to make anything significant on this but it's a great learning experience and to understand how things "do" work behind the scenes for the most part. i'm looking at this like a part time dividend from a non-dividend paying holding that i plan on holding for a long time anyways.
billions is being made and maybe lost too.