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Fully Paid Shares Lending Program - Etrade
Posted on 7/28/21 at 10:02 am
Posted on 7/28/21 at 10:02 am
I got an email about lending my fully paid shares for interest yesterday from Etrade, and am trying to figure out what the catch is. I can still trade just as I normally would, and I would make a bit of money.
Here's the description. I would assume most trading platforms do/offer this.
I don't really give a shite if they sell my shares short...maybe I can make some money off WKHS and RIDE
What am I missing?
Fully Paid Lending Program
Here's the description. I would assume most trading platforms do/offer this.
quote:
When you enroll your eligible accounts in E*TRADE’s Fully Paid Lending Program, you agree to allow E*TRADE to borrow your fully-paid-for securities (i.e. positions not purchased on margin) in exchange for potential income. We then loan your shares to other investors and market participants through the securities lending market if they become lendable due to high borrowing demand (often due to short selling).
I don't really give a shite if they sell my shares short...maybe I can make some money off WKHS and RIDE
What am I missing?
Fully Paid Lending Program
This post was edited on 7/28/21 at 10:02 am
7
Posted on 7/28/21 at 10:19 am to Chucktown_Badger
I was hesitant but wound up doing it at Schwab....easiest money you'll ever make for doing nothing. Wish I had done it sooner.
Shares were loaned out to short sellers.
Shares were loaned out to short sellers.
Posted on 7/28/21 at 11:25 am to Chucktown_Badger
I only have mutual funds with Etrade, assuming they are not targeting those, just individual stocks?
Posted on 7/28/21 at 11:32 am to Chucktown_Badger
quote:
What am I missing?
They’re going to lend your shares to people that are trying to drive down the price of your stock, but they’ll pay you for it. You also can’t vote if the shares are actively on loan.
It’s not typically a ton of money unless you own scarce stocks.
Posted on 7/28/21 at 1:53 pm to Chucktown_Badger
Just a heads up I did find this out:
Review on program from someone
So if you have dividend heavy stocks, this is a big deal potentially.
Review on program from someone
quote:
Dividends are paid “cash in lieu” – Under current tax law, qualified dividends receive preferential treatment. In other words, the income is taxed at lower rates. If a dividend is paid for any shares that are lent out, the dividend received will be credited to the account as “cash in lieu” and do not qualify for preferential treatment. This means that all dividends could be taxed at ordinary income tax rates.
So if you have dividend heavy stocks, this is a big deal potentially.
Posted on 7/28/21 at 5:28 pm to Chucktown_Badger
What kind of returns do you see on your account? I just went ahead and applied for it and got approved immediately.
From what I read I guess it will vary wildly person to person. Wondering if it was really anywhere near 10% though.
From what I read I guess it will vary wildly person to person. Wondering if it was really anywhere near 10% though.
This post was edited on 7/28/21 at 5:44 pm
Posted on 8/1/21 at 6:01 am to Chucktown_Badger
This is only for high short fee stocks where short shares are hard to find. In those stocks many retail investors and even some larger investors are requesting their shares not be lent out. So the brokers have to share the lending profits now to incentivize people to allow their shares to be shorted
Posted on 8/1/21 at 9:26 am to Chucktown_Badger
Can you not sell covered calls yourself and make more? As well as keep your dividends, etc?
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