Harness the Power of Stock Lending: A Comprehensive Guide
Stock lending is a financial transaction where one party, known as the lender, transfers shares of stock to another party, known as the borrower. The borrower then has the right to sell the shares and use the proceeds for any purpose. In return for the use of the shares, the borrower pays the lender a fee, known as a stock lending fee.
Stock lending benefits many parties. The lender earns a fee for lending their shares, which can provide additional income. The borrower can short sell the shares, which allows them to profit from a decline in the share price. Short selling is a strategy where an investor sells borrowed shares with the intention of buying them back later at a lower price to profit from the price difference. Stock lending also increases liquidity in the market, making it easier for investors to buy and sell shares.