Securities Lending

[TFCooper]

For those of you who own LCID, you may wish to lend out your shares. Lately, the rate has been about 9%.
Of course, there are arguments against lending, but on balance I decided it was worth it.

 

[Pwmac]

I received a letter from schwab this past weekend about lending my shares because they are in high demand at 8% but decided against it because I hope the shorts get squeezed.

 

[Genghis]

I received a letter from schwab this past weekend about lending my shares because they are in high demand at 8% but decided against it because I hope the shorts get squeezed.

Ditto. Don't make shares available for shorting to help a potential squeeze but retail holders don't hold enough shares unless they band together when institutions make millions of shares available to short sellers when they make high interest off the shares. When they are aligned, it is beautiful... look at Upstart (UPST) last year when it actually works. Went from 12 to 72 within 7 weeks. Hoping we have some catalyst to start a mini squeeze because the stock was way oversold when it went under 3.

 

[no gas]

I’ve intermittently lended in the past, why not make a little on the side….also, more shorts short, the bigger the squeeze is.

 

[Genghis]

I’ve intermittently lended in the past, why not make a little on the side….also, more shorts short, the bigger the squeeze is.

Nothing wrong with that as I have too. It's a good strategy if you're planning to hold long term, and you can tolerate the price dips. To each his/her own as it's your stock and money, and I'm all for anyone making money from the market! But being part of a squeeze play is almost as exciting as the first time you took your Air on a real drive.

 

[xponents]

Nothing wrong with that as I have too. It's a good strategy if you're planning to hold long term, and you can tolerate the price dips. To each his/her own as it's your stock and money, and I'm all for anyone making money from the market! But being part of a squeeze play is almost as exciting as the first time you took your Air on a real drive.

We should all join in with the the squeeze by buying more stocks that day

 

[TFCooper]

There are rational arguments for and against securities lending. Lots of institutional investors give their custodians a blanket authorization to lend out all their securities. OTOH, I remember when I worked at Goldman, the bond traders had a list of Treasuries they wouldn't lend out.
But I'd say that not lending to squeeze the shorts is more of a short-term strategy, and I'm in the stock for the long haul. (Assuming there is a long haul, of course!)

 

[no gas]

We should all join in with the the squeeze by buying more stocks that day

Buying every paycheck!

 

[bhramabull]

I’ve intermittently lended in the past, why not make a little on the side….also, more shorts short, the bigger the squeeze is.

How do we initiate the process?

 

[Cosmo Cruz]

Oh this is fun. Are we apes ?

(full disclosure ... yes I did play GME = I bought my ticket / took the ride.)

 

[Genghis]

How do we initiate the process?

You do it through your brokerage. If they have an online account management, you can usually authorize lending through your account settings after you complete some authorization forms. Otherwise, contact your broker.

 

[bhramabull]

You do it through your brokerage. If they have an online account management, you can usually authorize lending through your account settings after you complete some authorization forms. Otherwise, contact your broker.

Interesting. Fidelity tells me I need to have a 'margin account'. I wonder if the guy didn't understand my question or are they correct?

 

[borski]

Interesting. Fidelity tells me I need to have a 'margin account'. I wonder if the guy didn't understand my question or are they correct?

That's you loaning money from fidelity for you to trade with; basically credit.

Try again.

 

[no gas]

Interesting. Fidelity tells me I need to have a 'margin account'. I wonder if the guy didn't understand my question or are they correct?

You need to tell them you want to loan your shares. I think they call it a stock lending program.

 

[NoseyReporter]

FYI, usually if you own the stock and they need shares to borrow they will contact you. If you never get a call or email, you 1. Are using margin or 2. Don't own enough for them to want to borrow from you.

If you are using margin, the broker will likely already be using your shares. As for owning enough shares, they typically don't want to deal with the paper work of setting up SLP accounts for 100 shares or 1000 shares. They much rather approach people with larger positions because that's just less paperwork they need to do.

Coming from experience, I've lent LCID out in the past but decided it wasn't worth it and told them I no longer wished to let them borrow my shares. I never once called them, in fact they called and emailed me multiple times.

 

[Sandvinsd]

Fidelity now pays 10.875% for LCID shares!

 

[Cosmo Cruz]

It's so much fun to read this ... thanks folk.

 

[TFCooper]

Well, Fidelity is no longer lending my shares. It was fun while it lasted!

 

[NoseyReporter]

Well, Fidelity is no longer lending my shares. It was fun while it lasted!

Well well... Shorts are finally covering their positions. I hope.

 

[ken43]

Well, Fidelity is no longer lending my shares. It was fun while it lasted!

Fidelity (their program is called Fidelity Fully Paid Lending Program BTW) is still lending my shares as of 5/31. The most recent borrow rate for my shares was 17.5%!