The Big Problem With Share Lending - How Brokers Can Lose Your Money
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- Опубликовано: 15 мар 2022
- Share Lending has become an ever more popular way for brokers to earn money on top of the fees they charge their customers.
But share lending carries risks that are usually very poorly explained and understood by the customers whose shares are being lent out.
Brokers get to make a lot of money by lending out the shares of their customers while at the same time not taking on the associated risk.
And as a customer you have no say in the matter because you agreed to all of this by signing the Terms & Conditions.
Although share lending is common, it is by no means a risk-free process even after you consider the safeguards put in place by the borrower providing collateral.
In this video I will explain this risk in some detail.
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Great video. The bottom line is that when your broker loans out your shares, the broker is taking a short position as to you. That was the greatest realization in my mind from the GME debacle. Why did Robinhood and IBKE shut down trading other than to let their institutional, short investors cover? Because they had great short exposure to their retail customers (meaning that they owed shares to their retail customers they did not hold). The only solution was to allow institutional clients to cover and return short shares to the broker so that they could settle with retail customers. Eye opening to say the least!
Thank you! Has been researching about this since last hour, finally a worthy video!
Thanks for the enlightenment 🙏🏼
Great video. Nice work.
Thank you, Sasha, have a great day!
👍
Very informative video. Well worth knowing about this.
Thanks Brendon!
Go Sasha ! 😁
Love your knowledge and enthusiasm 👌
Thank you!
Love your brutal honesty!!! 🙏
👍
thanks sasha, very interesting video
Thanks Max!
My alarms were going off as soon as I saw it on Robinhood. Thank you for explaining it. I agree, lending shares is a big problem.. I hope people have not done it because their original investment will loose value for some quick buck.
Same, Robinhood is trying really hard to push stock lending, I almost agreed but my gut instinct said otherwise.
When shortseller is trying to reduce the price of my shares (not value, how you mentioned on 3:06), I will be more than happy about it, because I can buy these shares cheaper (means, more shares & with higher dividend yield).
underrated
Freetrade forum moderators tend to disagree with this. 🤦🤦 And im still blocked on their forum for asking this question why does customer take the risk not freetrade? You explained it really well. That is exactly what im worried about 😂😂🙏
People on FT forum dislike me as of late as I said they might as well do what 212 does, and offer CFD accounts. Even the slightest mention of 212 will get you the evil eye.
@@Sammyjane72x true that. I still find it weird they are evading some questions and just saying there is basically no risk
@@gofundyourself7305 This I find shocking. These sort of attitudes don't do wonders to inspire confidence.
This video was really not about Freetrade at all although I did suspect that one or two broker communities might decide to take it personally for whatever reason.
@@SashaYanshin sorry i got freetrade involved 😂😂 just out of interest are you aware of any brokers that actually take the risk on themselves while share lending? Im looking into it but haven't found anything yet
Love the doom and gloom then rolls the jazzy cheerful outro music! 😂
I thought I'd cheer up anyone who made it all the way through the video!!!
Thank you.
You earned my subscription at the end with the virus analogy lol
Great video! Shorting Tesla last year certainly backfired for Michael Burry. I’m still very optimistic for the company despite ongoing criticism.
Thank you for your observations on short selling. In any other aspect of your life it would be called grand theft.
Imagine hiring a property management company to look after a building you own and then having them “temporarily” sell it out from under you. They would be arrested for theft.
But somehow the SEC (and their ilk in other countries) allows this same despicable practice to be legally conducted with stocks.
No wonder Elon Musk calls them the short sellers enabling commission.
Yeah. I do get that shares are not unique and immutable like other things, but there really is no genuinely good reason for this practice to exist in its current guise.
The craziest part is people with only a few hundred in the market are shorting stocks now, this was once the domain of investment banks/companies only.
Very informative, thank you! I am using Interactive Brokers and was to mention that you can decide whether your shares are lent out and get 50% of proceeds. But you got it covered. I think they also state that they bear all the risk as well.
Do their terms say this, that they bear the risk, ie cover 100% same shares? I need to look into it, as I participate with some portfolios. If we could choose only which shares to lend / which to never lend through IB, that would be even better!
@@Li-yt7zh Please do look into it. My memory might be deceiving me. I am very new to investing and i found lending shares too scary to jump into it right away, so I did not go deeper onto the matter.
@@Lumpy_Peter 50percent of Profits, or 50 percent of all intrest?
@@JudenBrenen 50 percent of all intrest
thanks Sasha
Thank you for another great video. I've just joined IBKR so is there an option on IBKR that I can choose so my shares aren't lent out?
Buyer Beware! Thanks Sasha. You are the best.
Hopefully this helps people understand it a bit better!
Actually this is a very important video. People hardly talk about this when it is happening behind the scenes. What's more, this gives a better understanding on how things work to generate extra yield and the risks involved in such businesses.
There is a weird thing with people taking this sort of information as a personal attack or some kind of criticism of a specific investing platform - I am just explaining something pretty common that applies to many people using many platforms. I really don't understand why people are so beholden to a random investing app to get offended.
@@SashaYanshin why should anyone take this personally and be offended??? This is good knowledge to know about.
Do you edit your videos much? Your high vocabulary level combined with such irony is always a pleasure to hear...if unedited, boy you can talk
Thanks for the info! I use IBKR and intuitively set not to lend out my shares...but now I know why I was correct :).
Not much editing but a lot of preparation 👍
Another insightful video, do you know which companies do this service? What can we do to stop them from doing that?
That's why you use an ISA, the shares in it can't be lent out. I'm sure, if the brokers were to share profits, people would be more supportive of it.
Yeah. ISAs are excluded from share lending. The problem with share lending is that the practice just outright stinks. Everyone knows it, but everyone pretends it's ok because everyone makes money. Except for the people whose shares get lent out.
The ISA itself is exempt but the ETFs you may buy within it can still partake in securities lending I’m sure
I agree, it's a dirty practice. How does it impact the shares that aren't lent out?
I wouldn't be so sure. ISAs can ONLY be held in a nominee account. They are the legal property of your broker in their title. Thus, confiscatable assets in a broker liquidation! FSCS insures up to £85k only.
Thank you. Do you by any chance know if Degiro broker lends shares as well?
Great vid thanks for the info. I haven't completely decided what to do yet and was originally thinking to just transfer over from freetrade to invest engine completely and ditch my shares in individual companies to just have ETFs. But now I'm thinking to keep my ISA with freetrade and transfer most of my general account to the ISA come April 5th. Thus ditching my freetrade general account. I wonder what others are going to do. 🤔
lol, what timing. My brother (who also trades) and I were talking about this again today. We’ve been talking about short selling for awhile due to all the shorting of SOFI. Both of us are invested in SOFI and sick and tired of the shorts tanking the stock price of an amazing company. I actually called TD Ameritrade today about short selling. Gathering information about how it’s done. I need to ask if we can opt out of share lending. Will do that tomorrow. The guy at TDA said SOFI is HTB (Hard To Borrow) and the borrower would pay interest. ETB (Easy To Borrow) shares don’t pay interest. I didn’t but should have asked if they pay a fee. Can’t imagine they don’t make some money lending, even the ETB shares.
Would be great if you could keep us updated as to when Interactive Brokers introduce in-specie transfers for ISA accounts. They say end of March approximately, but not sure exact date
I definitely don't keep my finger on the pulse that closely - I probably will have no idea when it actually happens.
This video should be shared in freetrade forum
It really was not specific to any platform - genuinely. Even if some people in some communities seem to have decided to take it personally for whatever reason.
Well, pretty safe in Interactive's Brokers Stock Lending Program. Here 's what they have to say: "As checked with the corresponding team, IB is the customer’s counter party. As long as IB is solvent, the stock will be returned to the customer. In the unlikely event that IB becomes insolvent and is unable to return SYEP on-loan shares, the customer’s sole recourse may be the cash collateral securing the stock loan. That amount is available on the statement and Mark to Market Summary. Additionally, there have not been any cases of this scenario"
Sasha, what are your thoughts on udemy stock, would it be possible to do a deep dive 😉 😀. Thanks for all the quality content that you put out
Thank you, Sasha, for video. Especially, I like your comparison of short-selling with parasite & virus, because of its features.
From practical point of view, I don't see any issue that price of stock will drop, and that voting rights come to the short-seller (anyway, as little investor, my rights don't make really any difference).
But what scared me is (and correct me, if I am wrong): borrower provides collateral, which is 102-103% of borrowed shares market value, but in case, if shares rise fast, borrower (or discount brokerage on his behalf) cannot return full amount of shares, and collateral could be also compromised; so, you don't get back full quantity of your shares?
However, I see very unprobable, situation, that let's say, both shares went up 50%, and your collateral drops 50%; so, you will not get back 100% of your shares quantity lended?
Do I miss here something? Regards.
Hi John, I have work experience in this area; hopefully I can offer some sound advice.
A lender will provide a net amount of shares to us, the lending agent or broker, and we distribute these shares to multiple borrowers for a fee (aka interest rate) and margin % (or collateral % on top of market price) for each loan. Let's consider the scenario where the borrower offers to provide collateral with cash to acquire these shares for stock XYZ. The market value $ for the shares on an individual loan is $100,000. The collateral or margin requirement is 102%, so the borrower gives us, the lending agent, $102,000 in cash in exchange for X amount of shares (let's say 20,000 shares for $5 a piece).
Our borrower goes into the stock market, and sells 20,000 shares for $100,000.
It's been 3 months since then; today is a Thursday. The price has yet to change. We still report that this borrower has $102,000 worth of shares on loan that they owe us. The next day on Friday, Elon Musk posts a tweet, somewhere between spaceships and marijuana, claiming that he is going to invest heavily in stock XYZ and believes XYZ is the future of self-driving hotboxing vehicles. The traders in the stock market lose their fucking minds. Everyone is buying and inflating the share price for XYZ, and our super humble not evil borrower sees the stock price for XYZ go from $5 to $20.
So, the stock price increases 400%. This means the 20,000 shares the lending agent provided to the borrower went from a market value of $100,000 to $400,000. Lending agent requires a margin of 102%. So the lending agent now requires the borrower to provide cash collateral of $408,000, and tries to charge the borrower for cash of $306,000 ($408,000 - $102,000). The lending agent collects collateral from the borrower and returns it to the lender. However, the borrower is still responsible for going into the stock market, purchasing 20,000 shares for whatever stock price, today or in the future, and returning these shares back to the lender. Once the lender receives their shares back, the collateral is then returned to the borrower.
Since the counterparties or borrowers I work with contain pool their shares from such a large scale, I've never seen a case where a borrower was unable to buy back shares. I have seen cases where it takes a few days or a full week to buy back and return the shares they owe to the lender. I assume (fair warning here) that if the borrower was unable to buy the shares in the market in order to return them to the lender, the lending agent would keep the cash collateral as "insurance" for the lost shares, and return this cash back to the lender.
One last thing (POV of the borrower): when share prices go up, collateral charges go up. the lending agent will always require more collateral in response to share price increases in order to protect their relationship with the lender.
Another very interesting video Sasha. Thank you very much. Would it be a correct assumption to think that VUSA shares are less likely to be lost in contrast to individual companies?
Yes because the market fluctuations are going to be much lower and short sellers generally don't tend to go out shorting the S&P 500 overall in the same way they do individual companies + the shares lent out by the ETF itself is a very very different thing to your shares being lent out by the broker.
@@SashaYanshin Thanks for your response, that is good news. Would I still receive the dividends from the S&P500 if my shares are lent, and is there a way to know how many of my shares are lent or that won't be shown on the platforms and it is all run behind the scene?
@@stksport your shares of VUSA don't get Lent out. The vanguard VUSA management team buys shares of individual companies to go in the ETF, it's these individual shares that get Lent out. And yes your dividends are not affected.
@@stksport but , I do not know specifically in uk. But in the us ETF's are shorted by short sellers. Ark invest ETFs have had such problems in the last 6 months, maybe others but I would not recognise the names in reports.
What if you are holding the stock for a very long time and plan to stop lending well ahead of when you will finally sell it? These negatives sound bad in the short-term, but if the stockholder nominally retains the number of shares which they started with and then stop lending well ahead of their selling of those shares, it seems somewhat fine to me (although shorting the stock still has a bad incentive scheme).
Does saxo lend retail shares?
I think that it strongly depends on the broker: usually brokers that use sofisticated program to automatically stop a losing position and if the collateral or the margin of the account go out of a certain %, the software will automatically close the position or all the position at every time, and margin call is the last things that broker use to make an account payble for the stocks borrowed. Yes there are always risks, but choosing the right broker is fundamental . Trusted broker don’t give a lot of leverage, or at least they shoudn’t do it. But institutional account has often more privileges than retail accounts.
Another thing is that using small position reduce the overall risk, so people can do some things to lower exposition ma and risks.
Wealthsimple auto-enrolled me in their share-lending setup. Had to manually turn that off.
Watched a few share lending videos
Showing pro and cons
This the most entertaining and the most negative one
Am on freetrade and trading 212
Trading 212 now give you choice and you get 50 % of the apy rate 👍🥰🔥
Freetrade don't as of yet 🤨
For me I have always excepted the global economy and especially the stock exchange is a glorified ponzy scheme anyway
But most the money I invest is what I used to gamble so a win win for me 😂
BTW have brought a few stock with high demand for share lending with very apy on lending
Its excites me , and I have faith 🙏😬🤑🤕😅
Great video mate 👍
I saw shares lent (sold and then returned) on my M1 account and reached out to stop it from happening on my account in the future.
Which broker?
Sasha, how do you like IB's "yield improvement"/share lending program?
I talk about it in this video…
So what's the alternative for a free app with no share landing program
What trading app should I use then because I currently use Freetrade but they just started share lending
I take it ETFs and mutual funds within ISAs still partake in securities lending? At least some of them pay out some income from it
Yep - the ETF doesn't care if you are an ISA or a regular investor. You're buying their fund and their fund operates how they choose to operate. The benefit of a large ETF like a market index is that the proportion of shares lent out and the relative risks are entirely different to you as a retail investor having your shares lent out by the broker.
Does Lightyear do it? I am assuming not because they are new, have they mentioned anything about share lending anywhere?
Oh my....lol...I won´t take this personally, I do agree with you. I know I´m a sith on the dark side, the anti hero, but I buy things long too so there´s still a little Jedi in me but since november I´m more Palpatine. Shorting Technology sector, consumer cyclical, healthcare and real estate, industrials and financials, in that order, other sectors as they rotate into my short. My portfolio is long AND short.
But a retail trader can also buy shares to loan out. This can be very lucrative on HTB stocks.
I face that situation with SVS ! Luckily it was recovered through FCA scheme !
Really? What happened? I presume you're talking about the broker collapsing - but I think the situation there was very different to the topic of lending shares I cover in this video.
@@SashaYanshin yes that's correct
I wonder if the program would effect your ability to sell shares in the after hours?
Hey Sasha, I'm very curious. If you were to use IBKR, would you enroll in the Stock Yield Enhancement Program?
Any thoughts on the program?
@@afmomania i just have it disabled for now
So if i had a 100 shares of Apple and lend them i could lose my 100 shares ? Or get back less shares that i already had like 50 insted of the 100 that i lend out ?
I've said it before - it's HL for me all the way. Sure there are some fees, but they're dwarfed by profits. (As for these "free" platforms...well...there is no such thing as a free lunch, as the saying goes!)
A lot of people finding out that when things are free, there might be a catch or two!
Yes HL for me too at the moment. Occasional transaction fee is a small price to pay for being able to pick up the phone and call them, and also having a website, not just an app.
Another great video, do you have a recommendation on which stock platform to use? I'm relatively new to investing and use the freetrade app, I've just had to agree to their terms on share lending which until this video I didn't know what it fully entailed
Dude had a fight with his comb and the comb won. Lmaooo 😂
Sasha im a long term investor that recently started to lending, will this be worth it for me since I don't plan on ever selling?
Aren't ISAs protected against share lending?
They are, yes.
Id like to know this too
Where does it say this? ISAs can ONLY be held in a nominee account so never in your name under your title, and are your brokers assets in a liquidation! In fact, the FSCS has bailed in shareholders already above £85k.
Although isa are protected can the custodian still lend your shares?
Wait, how would short sellers be able to vote if they sold the shares?
A sensational summary of why I feel tricked by FreeTrade! And why I haven’t signed their T’s and C’s. Looking for a way to move to another platform now…
Got recently email from free trade that they will start doing that
It's by no means unusual - I expect many other new brokers will also jump on that bandwagon eventually.
They cant land ur share without asking you first, no? At least in Canada...
does this happens in shares held in pensions
Yep.
@@SashaYanshin well then, that sort of exposes how your catastrophic chain of events is extraordinarily overstated? Doesnt it?
I mostly disagree on this one, Sasha.
If I had an IB account (which I don't right now) I would lend all my shares out; you're getting extra return for free.
Going over your issues:
-I don't care if they make articles to try and reduce the share price, that's only going to last for the short term. I understand why you might be concerned, because some of the companies you're in are still issuing shares; so short-term low share prices reduces their ability to do that, but if you mostly aren't investing in companies at that stage it's not an issue.
-Obviously it would be better if I could vote on shares myself; but in the absence of that I'm not convinced people shorting the stock voting on it would necessarily vote against my interests.
Taking your example of Tesla, my primary issue with your target price is I think Tesla will need to reduce their car prices to get the growth you project, reducing their Margin. If I was shorting the stock (which I'm not, I don't short stocks) I would feel incentivised to vote against any proposal to reduce their car prices, as I think that's what's required for them to grow. But from your perspective, Telsa does not need to reduce their prices to grow, so I would be voting the way you want me to anyway.
There would be other issues which are less debatable, but such issues wouldn't have a 50/50 vote split which the shorter can swing.
-The scenario you're mentioning sounds highly unlikely, and I'm not aware of investors in these platforms losing any substantial money over it in real life, even in the case of AMC/GME you mentioned.
However, one issue you don't mention here which might genuinely be a problem is that as well as taking your interest payments from the stock lending; them lending lots of shares will presumably cheapen interest rates on lending shares, reducing the return from share-lending for everyone else. This would make the stock slightly less lucrative to people who were intending on buying the stock and then lending it out; reducing its intrinsic value. However, I don't think that's really a big deal and I'm not mad about platforms lending my shares.
But wait Sasha! Even though Buying puts does the same thing as Short selling - Short Selling is a crucial and vital mechanic to markets and absolutely needed to ensure the market works properly!
At least that’s what every short seller says……
Hope my sarcasm isn’t to obvious 😂
Btw since I didn’t say it - Great video and totally agree!
haha. I did briefly talk about that aspect at the end of the video. I hear the argument, but I also don't think there is a solid rational backing to it. A fruit market in a random country in the middle of nowhere operates absolutely fine on pricing without the shorting function.
true, but the modern orchard farmer may not fare as well, vs one hedged in futures trading. Not the same, but same vein of tools available.. Frankly why IS leveraged short selling still allowed !?! Just greed, or any logical arguments?
@@Li-yt7zh I still don’t see the need for shorting at all, not when you can buy puts and get the same or better return without forcing a supply demand imbalance.
And I’ve never bought this whole - short sellers do market research that no one else does.
I mean many of us knew NKLA was a heaping pile of crap and that Trevor Milton was nothing more than a Snake Oil Salesman back in the VTIQ days. It sure wasn’t Hindenburg Research that gave us all the info on that one…..
Thanks for the video. I started registering with T212 and saw this clause about share lending and stooped, as very worried with it. So, what happened if I have shares with T212 and when I want to sell, they have lent my shares to someone else? Does it means that I cannot sell??
That specifically is not an issue - your shares being lent out will not prevent you from being able to sell the shares. The back end process will be on T212.
@@SashaYanshin thanks
I use stake as a broker. They have just announced they will be doing this.. I’m off it, trying to opt out of that shite
Unlike many, they are passing on some of the profit and you get to choose if you want to do it or not - Interactive Brokers do the same and I actually think that's pretty fair. You get to decide if you want to lend your shares out or not AND you get some money for it.
Whats the best alternative to FREETRADE now that they lend out share?
Does Lightyear do this Sasha?
Nope and according to them have no plans to. 👍
How about SIPPs? Can brokers lend shares out of a SIPP in the UK or is it the same as an ISA and not allowed? Thanks 😊
The SIPP is not exempt from share lending :(
Yep - SIPP shares can be lent out just the same as regular investing accounts unfortunately.
@@stksport thanks for the info. That is literally insane, it’s people pensions 🤦🏻🤦🏻. Enjoying learning about finance and investing, but what grim space in places
@@FilthyCasual96 Exactly :(
Short Selling keeps prices honest for the most part. The examples you gave have more to do with the corruption inherent in the system such as when GME was shorted more than 100%. That being said I do not advocate loaning your shares out for the simple reason that you provide the ammunition to short sellers to bring the price down of the very asset you own.
Do vanguard lend out you etfs
Hold on, but the platform I use allows you to sell all of your shares, the total amount at anytime. If you have lent out 500 shares, you still can sell those lent out shares at any time. If it gets short squeezed like you've mentioned, you can take profit and buy back in etc...
This
What is the policy decision behind not allowing shares within an ISA to be borrowed out?
It's a legal requirement because of the increased level of risk.
Do most brokers do this?
What action do you think the average person with long term mortgage debt and working to pay things off handle things RIGHT NOW?? What should we do with our cash emergency funds sitting in the bank. Our mortgaged homes? Our government bonds abs retirement funds? What should we do TODAY to prepare for this reset before we lose everything?
I know that freetrade have just started this so where can I open a GIA that doesn't do this and cost the earth?
This is what I was talking about this trading212 I use an isa which excludes me from it
I brought CALA stock and after that all my share lend out. I could not vote for my share and share drop 85% and I made only 2 dollars for 4000 shares and share voted for liquidation. Now after watching this video I opt out share lending. I lost more than 3000 dollars and mad only 2 dollars for CALA share. My other share also loose so much money. Thanks for spicy video. I believe short seller and greedy brokers try to remove this video.
For me, Stock Yield Enhancement Program = Off
The risk reward just isn't worth it at all.
Those people borrow are short sellers anyway... F 'em !
I think in the past you have mentioned that you use Freetrade ISA (correct me if I am wrong here), if/when you change your ISA provider can you please let us know? (if you are okay doing that)
Never used Freetrade for my ISA 👍 My plan is to use Interactive Brokers next financial year.
Key is to stay under 85k whatever broker or account you have as you are covered under FCS for any eventuality.
I cover that particular nugget in the video too....
So we should just all move over to IBRK?
Correct me if am wrong but Archegos went bust due to leverage but were long all their positions why are you implying the failed because they were short selling?
I was implying that a highly leveraged hedge fund can collapse in that point.
It can be very lucrative. I was given the choice 3 years ago to enter Etrade's (my US broker) fully paid lending program , chose to, and made over $70,000 in the last 2 years lending my shares in 2 companies out. Both are long-term holds so shorts don't bother me. Also, Etrade is a very large company, now owned by Morgan Stanley, so they are not likely to become insolvent and I think the risk/reward is very much worth it. Fully paid lending is only allowed for cash accounts, margin accounts don't do it for obvious reasons.
Just wondering what was your portfolio worth to make that kind of money
@@subhash2552 The entire portfolio has probably averaged around $1M USD but I've consistently made around 9% loaning out those two stocks so they were worth less than $400k on average. None of my other stocks were consistently borrowed.
What were the two stocks?
Does light-year share lend?
I am actually not entirely sure. I don't think so, but don't know for sure.
They've been writing FORGET GAMESTOP all year long and shorting it. DRS Direct register your shares!
register your shares for what?
@@SashaYanshin If you have brokers like IBKR, you can use their service to direct register shares you own, which means your name is registered with the company you have shares in directly with that company's transfer agent. If you don't register you will always own shares that is in the name of the broker's street name.
Registered shares 100% cannot be lent out by someone else.
@@SashaYanshin It takes those shares out the hands of the DTC /cede and co so they dont lend our your shares to short.
It's also to prove the naked shorting theory that if retail can directly register the entire float whilst their still being shares traded then it proves the stock is being manipulated. Just look at XRT the ETF GME is in. Over 1000% short interest. The whole thing is corrupt, not just these bad actor hedge funds, the DTC is complicit, the SEC is complicit they just slap them on the wrist and give them a fine, it doesnt solve the problem. Abusive naked shorting has taken place on GME for over a year now and I cant wait for the day it all gets exposed.
Welcome to the revolution, my friend. Trillions stolen, many thousands of deaths from crashes related to lending. And if you think your IRA/pension shares are safe, I got a bridge to sell you. DTC/NSCC/OCC can always go in and borrow/rehypothecate to fulfill CNS obligations.
I really thought the whole video was going to lead nicely up to a plug for light-year too... They must partake in share lending too hahaha
I don't actually know. I don't think they do - they are very new at the moment and working on an appointed representative basis but I don't actually know for sure. :)))
@@SashaYanshin haha good answer 😏
Wouldn’t lightyear eventually share lend?
Many platforms do - I am not sure if Lightyear will or won’t. Just pointing out the issues other people aren’t covering.
@@SashaYanshin thanks I was doing research about this yesterday with 212 and they said it didn’t include Isa’s but I agree it’s a bit shit for general accounts
I'm not lending my shares, but I'm suspecting that someone is doing this to my stocks.
Surely the short seller can't vote on your shares, as the short seller sold your shares that he borrowed. So surely it's the buyer at the other end of the deal who's doing the voting.
Yeah. Addressed a similar point in another comment. :) You’re right unless the timing is particularly specific.
Well, don’t they have to have collateral, and can’t they get margin called?
The collateral is for the shares being borrowed with the broker. That collateral can and sometimes does come from leveraged funds.
This is a grim subject to bring up right now when everyone is "trying" to stay positive in a crash. Thanks Sasha. 😭
Sorry! 😂 Was a general video aiming for the long-term. Not trying to be specific about the current situation!
Does trading 212 do this?
Yep - I mentioned them as one of the companies that does do this in the video. But the fact is many brokers do this - they are by no means unusual in that aspect.
Shorted alibaba yesterday and now I feel even worse 😕
You really picked a day to do it!
@@SashaYanshin the day before that I sold the bag I was holding 😞
Short sellers don't vote, because they sold the shares too :D
Depends on intent and timing I guess but yeah - fair point.
I think if you put a sell order (put it at a ridiculous price so it is not a risk at all) they cant land your shares. So ALL put a sell order 1000% over the actual price.
I like the way you think XD!
Stash does this but I get paid for it.
So all my 3,000 nio stock are getting lent and shorted against me. Wtf ???
Yeah pretty much
Short selling should be baned !
I am genuinely confused as to why the regulation on it is not more tight - e.g. prohibiting retail investors from having shares lent out would be a great first step. And then enforce a rule where sophisticated investors have to have a choice - this would ensure platforms HAVE to profit share to provide some form of an incentive.
@@SashaYanshin Would be sensible if the average Joe were the priority for regulator & legislation bodies. But hey, the same thing happens to our monies "deposited" in our bank accounts. Even after historic bailouts of the past, none of it seems to be changing anytime soon 😂 😭