The word is rehypothecation. It looks like many good things can happen...Good interest. Owning (what I feel...But someone else doesn't) a good quality stock. Here are three drawback I think I can see...Tell me if I am wrong. The margin holder files bankruptcy. That could be a State (California, Illinois), a pension fund, bank, or the individual person. It is tied up in the courts. Their collateral is junk...Fraud (Enron, Bitcoin). The last would be what happened in the 1987 crash. Below is a copy and paste. The stock market crash of 1987 was a rapid and severe downturn in U.S. stock prices that occurred over several days in late October 1987. ... On October 19, 1987—known as Black Monday—the DJIA fell by 508 points, or by 22.6%. Up to this point in history, this was the largest percentage drop in one day. I remember this day because THERE WAS NO MARKET!! There was just seller, no buyers...It was scary!! Could you think of any other bad situation that could happen?? If their margin call is less than their assets would I share the loss with the broker?? I'd like to use Apple stock as an example. I believe the company will be there and be solid 5 years from now. But, I also believe we could see a worldwide recession (Apple stock drops 30%). People will need to go with cheaper phones, till they can afford a new Apple phone. So though my broker, I am willing to loan the stock out. Or would it only be stocks like Tesla?? Thought...