Ok brings up lending stock to a brokerage and getting a return. In this specific case they were using Well stock.
I have never heard of this before. Its sound like a possibe way to gain "yield" .
Can you better explain this and also what risk is associated with doing this.
Thanks
John
Short sellers have to pay a 'borrow' fee when they borrow shares in order to short. Until recently, brokers kept this money to themselves, as part of profit. It is a very lucrative business. But some such as WealthSimple have started to share these fees with clients. It is a way to earn extra yield, but few brokers share the fees right now, and there can be restrictions. There are minor third-party risks, in that fully paid shares are lent out to another party. Margin rules typically protects the lender of stock, but in the case of a broker bankruptcy there can be delays in getting one's stock 'back'. When Lehman Brothers went under there were some delays in stock transfers, but the Canadian record on bankruptcies is quite solid. Investors still own their shares, and get their dividends as well (dividends are paid by the stock borrower).