Yeah!! Well, I'm going to keep it safe with my brokerage account at Lehman Brothers and my checking and savings accounts at Wachovia Bank...
@Cabin 111 From your post • The principal risk in any securities-lending transaction is counterparty default. Fidelity is your counterparty on all fully paid lending transactions. If Fidelity were to default on its obligations as defined in the MSLA, you would have the right to withdraw the collateral from the custodian bank in the manner described in the Collateral Administration Agreements. In the event that you make a withdrawal request, the bank will transfer an amount equal to your current collateral amount (or such lesser amount as you may have requested) to your specified delivery instructions. If you were to choose to use the collateral proceeds to repurchase securities, this would be considered a new purchase and, potentially, a taxable event.
Chewing chewing...I'm going to let it die. Collateral Administration Agreement...I am sure will be in Fidelity's favor (their attorneys wrote it). I can't sue Fidelity if there were a problem...Always have to arbitrate. It would be like reading the fine print of an annuity. Over the years, I have owned over 10 notes and deeds of trusts. I would read and write them carefully. A couple even had exclusion from bankruptcy...Though they were never tested in court. Over the last few years I wouldn't touch them (buy them). I look at the delays that were caused by Covid in the courts. At my age I don't want to test new ground...Make sure there are no headaches to administer our estate upon death.
It is like all risk management. Some is OK, but not enough to create a problem, but not none. I use IB's and make about 3% a year on very liquid, small and mid caps. You can chose which ones also.
Hey guys, slightly off topic, can someone please recommend a broker that has the lowest cost for selling short. I'm taking both fees and potential interest gains from USD holding into account. Thank you.