Lend your U.S. stocks and get paid, without lifting a finger.
What is Stock Lending?
Stock Lending is Stake’s take on securities lending – a common practice where brokers lend out stocks held by their customers and collect interest from the borrowers.
But with Stock Lending, you win too. In an Australian first, we're sharing the earnings with you, the stockholders. You won’t need to lift a finger. If your stocks get lent, you’ll get paid.
How does Stock Lending work?
Payday comes monthly
If a stock you hold is lent out, you receive a Stock Lending Payment (your share of the borrowing fee) in your Stake Wall St wallet, as buying power.
We do all the legwork
Stake connects your stocks to those interested in borrowing them. We manage everything, you just sit back and clip the ticket.
keep trading as usual
Stocks on loan are still yours to sell, realising any gains or losses at any time. Selling will simply terminate the loan.
How much could I earn?
This calculator can give you an idea of what your Stock Lending Payment would be based on different dollar amounts on loan as stocks.
Hypothetical stock value on loan
Hypothetical annualised interest rates
Example annual earnings
Calculations are estimates for illustrative purposes only and do not guarantee future results. Your stocks are not guaranteed to be lent. The actual lending interest rate applicable to any loan fluctuates based on a variety of factors including borrower demand, availability of stocks, interest and market conditions. This means that your returns may vary. This should not be taken as financial or investment advice.
The borrower of your stocks needs to provide cash collateral worth 102% of your stocks on loan. This would protect you in the event that a borrower can't return your stocks. The collateral is kept separately and adjusted each business day to match the market value of your stocks on loan.
Dividends & voting
You retain economic ownership of any lent stocks. That means you'll still receive any dividends owed to you and you can sell the stocks at any time. If any corporate actions take place while your stocks are on loan, simply opt out of Stock Lending in Settings to vote. You can opt back in later.
Stock Lending is coming soon.
Once launched, your U.S. stocks will then be available for Stock Lending, but you'll be able to opt out at any time (Wall St Account > Settings > Trade settings > Stock Lending settings). Nothing else changes.
Securities lending is when a broker lends stocks owned by customers out to a borrower – typically an institutional investor, not another individual. In return, a borrowing fee is paid by that borrower to the broker, like interest. This borrowing fee is how lots of brokers around the world make money. Borrowing stocks can help the borrowers create an efficient market and also support an investing strategy, such as short selling.
Stock Lending is a feature that allows Stake customers to earn extra income from lending out the U.S. stocks they hold through the securities lending market. To learn about Stock Lending in detail, read Stock Lending Explained.
Stocks are typically borrowed by institutional investors and banks. Our partner DriveWealth will be borrowing your U.S. stocks. They will re-lend your stocks to other parties that might be interested in market making, covering failed trades or meeting margin requirements – just to name a few reasons for borrowing securities.
All the stocks in your Wall St account(s) will be eligible to be borrowed, however there is no guarantee that they will actually be part of any loans. Whether your stocks are borrowed or not depends on borrower demand.
When your stocks are lent out, you will receive a Stock Lending Payment. This is your share (20%) of the fees paid to Stake by the borrower. Your Stock Lending Payment will be credited to you as additional buying power (USD) in your Stake Wall St wallet on the 15th of each month or the following business day.
Stock Lending represents an additional source of revenue for Stake. Our share of the borrowing fee helps us operate a sustainable business, while continuing to offer a low-cost brokerage model. The part we pass on to customers means we can provide you with Stock Lending Payments as an extra source of passive income you wouldn't otherwise access.
You’ll be able to trade without restriction. You can sell your stocks at any time and realise any gains or losses as usual. If your stocks are on loan when you initiate a sell transaction, this will simply terminate that loan.
The way you use Stake day to day doesn’t really change. You can continue to trade normally, selling your stocks at any time and realising any gains or losses. The only difference in the app is the setting where you can opt out of Stock Lending, if you wish.
You continue to receive dividends for your stocks, even when they’re on loan. Our partner DriveWealth will generally recall loans ahead of dividend payments, so you receive dividends as normal. However, if there is a dividend payment or other distribution made while your securities are being lent, you'll receive an equivalent cash payment to reconcile that.
While your securities are on loan, you won’t be able to exercise voting rights. If you want to participate in an upcoming vote for a stock that’s on loan, you can opt out of Stock Lending to end the loan and vote. You can opt in again after the vote to resume participating in Stock Lending.
In the event that a borrower can't return your stocks, you're protected by something called collateralisation. The U.S. Securities and Exchange Commission requires borrowers to provide assets of at least the same value of the borrowed stocks, which brokers are required to set aside in a separate collateral account. These assets are provided as collateral and will be available to you in case the borrower is unable to return your stocks. If the stocks are returned as normal, the collateral goes back to the borrower. It's a bit like the rental bond that a tenant leaves with the real estate agent for the landlord's peace of mind, in case something goes wrong.
Stock Lending is available to all customers with a Wall St account in Australia, New Zealand and the United Kingdom. In Australia, individual accounts, SMSF (individual or company) accounts and company accounts can all participate. If you have an SMSF account and securities lending is prohibited by the terms of the fund’s Trust Deed, you must opt out of Stock Lending.