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 benefit too because 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 arrange everything, you just sit back and enjoy your earnings.
keep trading as usual
You retain complete control of all your holdings and any stocks on loan are still yours to sell, realising any gains or losses at any time.
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.
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. 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.
Yes, you can opt out at any time by following these steps in your Stake account: Wall St Account > Settings > Trade settings > Stock Lending settings. If you do have any stocks that are on loan at the time of opting out, doing so will simply terminate the loan.
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.
Yes, 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.
No. By opting in to our Stock Lending Program, all your holdings will be eligible for borrowing.
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 security deposit that a tenant leaves with the real estate agent for the landlord's peace of mind, in case something goes wrong.