Stock lending

Discussion in 'Stocks & Derivatives' started by mmm....shiney!, Jun 23, 2022.

  1. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    Stake is introducing a stock lending program giving users the opportunity to lend their US shares in return for passive income which varies according to demand.

    The stocks will be collateralised, but there is a risk of loss, they will become the property of the borrower until the agreement is terminated.

    https://hellostake.com/au/legal/stock-lending-explained

    What are people's thoughts on this?
     
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  2. Real $

    Real $ Active Member Silver Stacker

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    Got this notification today, joined stake afew mths back after a positive review from a member here. I like the idea of making more money but have no direct exposure to wall street stocks only indirectly through Nasdaq etfs and global healthcare. With current economic situation and uncertainties I wouldn't personally pledge for this but just an obvious amateur opinion ;)
     
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  3. Ipv6Ready

    Ipv6Ready Well-Known Member Silver Stacker

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    I just opted out. Without knowing how much I will get paid not worth another complexity to tax situation.
     
    Last edited: Jun 23, 2022
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  4. Oddjob

    Oddjob Well-Known Member Silver Stacker

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    When I hear the term "stock lending", my mind drifts back to simpler days before Covid, before Tesla, before crypto currencies and wide spread social media...a time before QE to infinity was an art form...when USD700bn could fix the US banking system and you didn't need to redraw on the mortgage to fill up your car.......yes those magical days and when I look back at that time it was magical compared to now / last few years......was 2007/8/9...GFC time....Oh the money that was made in the years running up to those times, then it all came tumbling down along with some stock brokers and share lenders...a few names come to mind..Tricom, Opes Prime, Chimaera / Primebroker Securities.

    There's usually a few winners in share lending in a down market and it ain't the punter who lends out their shares.
     
  5. herkyderky

    herkyderky Active Member

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    the offering of stock lending programs is directly related to short selling.....you need to borrow the share to sell it short and the only reason you sell it short is if you believe its going to drop.
    In the current market climate I think lending your shares out so someone can bet against them seems a little foolish.
     
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  6. Ipv6Ready

    Ipv6Ready Well-Known Member Silver Stacker

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    Nothing wrong with short selling.

    Shorters do a great service for long term investers by lowering price today so long term buyers can buy the stock cheaper and pay us interest if the owner decide to lend.

    Much like I lease out my investment properties to earn rent.

    Shorting is only a concern if the owner need to sell asap.

    If Stake stated what I will earn for lent stock, I could be very interested.

    Say i can earn 2% to 3% on a stock that doesnt pay dividends, doesnt make any revenue but has potential in 3 to 5 years ie mining exploration companies. Silly not to make some side hustle.

    At the moment without Stake clearly specifying rates I will earn for lending, I have decided its not worth it, much like I wouldnt assign my property to a real estate agent if they could not tell me how much rent I am likely to earn)

    Most invester who have issues with shorts usually are novice or simply don't understand how the market works.

    Traders make money in quick time frame, hours to months by both shorting or going long.

    Trading and Investing is not the same but both can make on the same stock but in different time frame.

    Investers trade longer term 3 to 10 years.

    No investers should be buying shares today worried about prices tomorrow, if the plan is to sell in 3 to 10 years
     
    Last edited: Jun 23, 2022
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