Market structure of stock lending

Discussion in 'Stocks' started by ScroogeMcDuck, Apr 10, 2024.

  1. The stock-lender gets to collect interest on the cash collateral, in addition to the interest you pay them to borrow their stock. So in a high RFR environment like this the equilibrium rate to borrow boring stocks like AAPL ought to be negative. But on IBKR it never goes below 0.25% for anything. Is there another broker where you get paid to borrow AAPL?
     
    d08 likes this.
  2. or alternatively, is there some marketplace where I can go and offer to lend out shares of AAPL at a negative interest rate which would be more than covered by the interest on the cash collateral? Structuring the stock lending market to have a zero lower bound on rates would be kind of dumb.
     
  3. zdreg

    zdreg

    You are fighting a lost battle. You are fighting a highly profitable center for brokerages firm. Brokerage firm collect interest on any collateral cash.
     
    d08 likes this.
  4. Cabin1111

    Cabin1111

    I wrote a thread about this a year or two ago. Fidelity offered me a good premium for my Toray Industries (TRYIY) that I bought on the Tokyo Exchange. They offered me diddly/squat for my QQQ!!

    With Toray, I figured I was dealing with 5-6 different entities concerning the loan out (from the ADR company to the exchanges/clearing houses). If one had an issue, I didn't want to deal with it...Having something tied up the in courts for years.

    If I was younger, I would look into it...Depending if you are willing to buy and hold the stock.
     
  5. Fain

    Fain

    it does go negative on apple.