Stock Lending Programs: Extra Income or Hidden Risks?
Durham News Today | 2 Min News | The Daily News Now! · The Daily News Now!
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Show Notes
Major brokerages like Fidelity and Schwab are offering stock lending programs, allowing investors to earn extra income by loaning out their shares. With minimal requirements and variable rates, investors can potentially profit from high-demand stocks. However, risks such as losing SIPC protection, higher taxes, and giving up voting rights should be carefully considered. This opportunity is best suited for large portfolios heavy in hard-to-borrow small-cap or niche stocks, particularly in tax-free Roth IRAs. Review your holdings, agreements, and track tax costs before deciding if its a worthwhile addition to your investment strategy.
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