Fidelity’s Fully Paid Lending Program will share the profits from stock lending. I have done this with TSLA and other stocks, and the return can be very lucrative (50%+ annualized), but only when there is great demand to short a stock. https://www.fidelity.com/bin-public/06 ... vestor.pdfFZROX yes. But if you hold TSLA stock as in the example above, Fidelity cannot lend out your TSLA shares without your permission.In FZROX, for example, the prospectus states that the fund strategy includes "Lending securities to earn income for the fund." So by purchasing shares you give your permission. I own FZROX and knew shares are lent.Fidelity cannot simply lend out your Tesla shares without your permission.Say you own TSLA stock within Fidelity. You do absolutely nothing with the stock and plan to hold it until you've exhausted your IRA and 401k in retirement. All this time, Joe and Bob and Ray all think TSLA is way overpriced and is going to nose dive and they're willing to put their money where their mouth is. So they all Sell Short. This means they're selling now (stock they don't have) and promise to buy it at some certain date. So where does that stock come from? It's borrowed from Fidelity who borrows it from you. The short sellers pay a fee to do this. Vanguard does this. Fidelity does this. Schwab does this. This is one reason Fidelity can offer zero funds (a bunch of stocks) for zero expense ratio. The stocks within these funds are constantly "loaned out" in these short selling cases. There are funds (at least there were some time ago when I looked) from SALT that have negative ERs meaning they pay you to hold their fund. They've created the fund and I'd guess that they include stocks that are often short sold so that they can make their loaning money easily and make so much that they can pay you.
I believe Interactive Brokers has a similar program.
Statistics: Posted by investorpeter — Tue Mar 12, 2024 6:22 pm — Replies 32 — Views 2359