Do you think that a retail trader can negotiate the lending fee with his broker (in my case interactive brokers)? My broker lends only 40% of my shares at 20% lending fee, but maybe they could lend all my shares if i accept a lower fee (15% instead of 20%).
Thanks Lies - you have hit on a fundamental question here - the lender's strategy. Do you chase best return per $ at risk or do you go for absolute returns? It seems that Interactive is happy to have a lower percentage on loan at higher fees, the better risk/return strategy. It's tied to their overall approach, so it's unlikely they would make an individual exception. They may be conservative on the hottest names in case clients sell out - they want to keep their reputation for stability with the borrowers. It's leaving a lot of money on the table though, so it may be worth discussing and also exploring returns and approach with other brokers.
Do you think that a retail trader can negotiate the lending fee with his broker (in my case interactive brokers)? My broker lends only 40% of my shares at 20% lending fee, but maybe they could lend all my shares if i accept a lower fee (15% instead of 20%).
Thanks Lies - you have hit on a fundamental question here - the lender's strategy. Do you chase best return per $ at risk or do you go for absolute returns? It seems that Interactive is happy to have a lower percentage on loan at higher fees, the better risk/return strategy. It's tied to their overall approach, so it's unlikely they would make an individual exception. They may be conservative on the hottest names in case clients sell out - they want to keep their reputation for stability with the borrowers.
It's leaving a lot of money on the table though, so it may be worth discussing and also exploring returns and approach with other brokers.