This was a good video, it explained in good detail how stock lending works. Thank you very much for sharing and I have a better understanding now on stock lending.
I just had someone buy my SOFI shares. Only 5 shares though. SOFI is currently up, so I’m wondering if it’s going to drop. I did buy mine on a dip just at $8 a share. As of today it’s up close to $9. This is telling me TECH might be going down
When you say ownership transfers, does this mean lender will get benefits like Dividends offered during his lending tenure or does he/she obliged pay the benefits he received back to borrower? Whats the norm here?
I was just offered the ability to lend my stocks. It sounds like, since the market is about as low as it was at the bottom of the COVID 19 level, that lending out my stocks is a horrible idea until they recover again. Is that correct?
Do shorts borrow shares and then sell them below market in order to drop the price? If so, how can shorts have any borrowed shares left with OCGN today? When the volume is 400k and shorted volume is 80k-100k? And the sp has been increasing massively in the last 2 days. Only thing that has keep it down has been shorts. They have to be out of shares. Idkwth
Al, thanks for your comment. Shorters will borrow shares in an attempt to sell them on, and buy them back below market price, which makes them a profit from the difference between sell price and buy back price. If there are lots of people doing this, it exerts downward pressure on the underlying stock which sometimes causes it to drop. It wouldn’t make sense for shorters to sell borrowed shares below market value as it decreases their probability of profit as the stock would have to move even further down for them to profit. Hope that helps.
The lender will earn "interest" or a fee payed by the borrower. So if you have say 1000 shares of a stock you could have several people borrowing shares and paying you a fee to do so.
Does the broker for example Degiro always need Jack´s approval? I´m thinking of opening an investment account, but degiro says they have share lending on, so im scared of losing my shares. If i open a degiro account, does it mean that i automatically accept all lending requests?
Hi Aleksi, great question. It all depends on your contract with the broker. Some will be discretionary and some will be execution only. I suggest you check with Degiro first and make sure you completely understand what they will do for you. Hope this helps :)
@@KINGCADEMY i found this on Degiros site " Securities lending When you become a client, you give DEGIRO the right to lend out your securities. This is done to be able to facilitate going short; ‘Debit Securities’. The risks of Securities Lending are managed as follows: - Firstly, DEGIRO (and not the borrowing party) is the ‘counterparty’ and therefore guarantees the timely return of the lent assets with its own equity. - Furthermore, DEGIRO requires security from the borrowing party. This is provided by the right of the pledge that DEGIRO has on the balance of that client and the borrowed assets are included in the continual risk monitoring of DEGIRO. - Damage for a client whose assets are lent therefore arises only at the moment when both the borrowing party and DEGIRO are no longer able to meet their obligations (i.e. are bankrupt) and the value of the asset has fallen or the value of the lent securities has risen. The amount of the damage is limited to the difference in value between the lent securities and the security provided by the borrower. " I guess i will go to another broker.. i don´t want any risks like that.
Sir plz make videos on these LTCM strategy and its fall Bill ackman 2.8bn$ profit trade last year Clawback in startups Liquidation preference Plz sir this is my humble request
This was a good video, it explained in good detail how stock lending works. Thank you very much for sharing and I have a better understanding now on stock lending.
That was fantastic!
I just had someone buy my SOFI shares. Only 5 shares though. SOFI is currently up, so I’m wondering if it’s going to drop. I did buy mine on a dip just at $8 a share. As of today it’s up close to $9. This is telling me TECH might be going down
When you say ownership transfers, does this mean lender will get benefits like Dividends offered during his lending tenure or does he/she obliged pay the benefits he received back to borrower? Whats the norm here?
I was just offered the ability to lend my stocks. It sounds like, since the market is about as low as it was at the bottom of the COVID 19 level, that lending out my stocks is a horrible idea until they recover again. Is that correct?
So is there any risk here for Jack, or does the broker absorb all the risk? And does Jack make or loss money in either scenario?
How we can loose money?
Do shorts borrow shares and then sell them below market in order to drop the price?
If so, how can shorts have any borrowed shares left with OCGN today? When the volume is 400k and shorted volume is 80k-100k?
And the sp has been increasing massively in the last 2 days. Only thing that has keep it down has been shorts. They have to be out of shares. Idkwth
Al, thanks for your comment. Shorters will borrow shares in an attempt to sell them on, and buy them back below market price, which makes them a profit from the difference between sell price and buy back price. If there are lots of people doing this, it exerts downward pressure on the underlying stock which sometimes causes it to drop. It wouldn’t make sense for shorters to sell borrowed shares below market value as it decreases their probability of profit as the stock would have to move even further down for them to profit. Hope that helps.
Good video. Thanks
So if I loaned out a share worth 100. dollars and it has a 90% cost to borrow that stays that way, how much did I make in a day?
What does the stock lender (Jack) make?
The lender will earn "interest" or a fee payed by the borrower. So if you have say 1000 shares of a stock you could have several people borrowing shares and paying you a fee to do so.
Does the broker for example Degiro always need Jack´s approval? I´m thinking of opening an investment account, but degiro says they have share lending on, so im scared of losing my shares. If i open a degiro account, does it mean that i automatically accept all lending requests?
Hi Aleksi, great question. It all depends on your contract with the broker. Some will be discretionary and some will be execution only. I suggest you check with Degiro first and make sure you completely understand what they will do for you. Hope this helps :)
@@KINGCADEMY i found this on Degiros site "
Securities lending
When you become a client, you give DEGIRO the right to lend out your securities. This is done to be able to facilitate going short; ‘Debit Securities’. The risks of Securities Lending are managed as follows:
- Firstly, DEGIRO (and not the borrowing party) is the ‘counterparty’ and therefore guarantees the timely return of the lent assets with its own equity.
- Furthermore, DEGIRO requires security from the borrowing party. This is provided by the right of the pledge that DEGIRO has on the balance of that client and the borrowed assets are included in the continual risk monitoring of DEGIRO.
- Damage for a client whose assets are lent therefore arises only at the moment when both the borrowing party and DEGIRO are no longer able to meet their obligations (i.e. are bankrupt) and the value of the asset has fallen or the value of the lent securities has risen. The amount of the damage is limited to the difference in value between the lent securities and the security provided by the borrower.
" I guess i will go to another broker.. i don´t want any risks like that.
Sir plz make videos on these
LTCM strategy and its fall
Bill ackman 2.8bn$ profit trade last year
Clawback in startups
Liquidation preference
Plz sir this is my humble request
Great ideas. They are on my list. Thank you Tech God!
I really don't see the risk Jack is taking.
Your videos are really good, well explained, and all-in-all really good quality! Thank you for making this @KingAcademy
This means alot to me :) Thank you Tom! Glad you enjoy them, many more to come.