Retail stock lending

[joequestions]

Hi

Is there any possibility for retail investors to lend out their stocks for the facilitation of short selling? It's completed in the market by super funds etc regularly to get a better return on their shares. I would be quite interested in doing it.

Thanks
Joe

 

[DaveDaGr8]

Not that i know of really.

Maybe google covered calls

 

[cynic]

When exploring options for portfolio return enhancement, it may pay to bear in mind that a covered call is basically the equivalent of a naked written put. The risk/reward profile is quite different (to that of stock lending) and can backfire badly in ways that stock lending never could!

 

[skc]

Hi

Is there any possibility for retail investors to lend out their stocks for the facilitation of short selling? It's completed in the market by super funds etc regularly to get a better return on their shares. I would be quite interested in doing it.

Thanks
Joe

You can do that with interactive brokers.

The Stock Yield Enhancement program provides customers with the opportunity to earn additional income on securities positions which would otherwise be segregated (i.e., fully-paid and excess margin securities) by permitting IB to lend out those securities to third parties. Customers who participate in the program will receive a portion of the fee paid by the borrower as loan compensation for any day the loan exists and will receive cash collateral to secure the return of the stock loan at its termination.

http://ibkb.interactivebrokers.com/node/1838

I don't have any knowledge about it except knowing that it exists. Best read the finest of the fine prints to understand the risks.