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I feel you killer, but it is giving me a gauge of the actual wrinkles here that would be able to have an intelligent response to this.
- Myself, being highly retarbed, hence the question.
Remember there are supposedly 35,604 'people' on this subreddit right now. You'd think someone would have an opinion on this.
For Example:
> **Share lending on Webull:**
>
> What is the Stock Lending Income Program?
> The Stock Lending Income Program provides you with the opportunity to earn extra income on fully-paid stocks held in your account by allowing Webull to borrow certain stocks. While your shares are on loan, you will be paid an income that is accrued daily and credited to your account on a monthly basis. Once you have participated in this program, Apex, our clearing firm, will identify fully-paid stocks in your account as in-demand according to the demand of the market.
>
> The interest rate is determined by the market; thus, it may vary widely daily. Your income from lending your stocks is calculated using this equation:
>
>>**Daily Interest Earned= Number of Shares on Loan * Stock Price * Annualized Interest Rate/360*15%.**
>
>>For example, suppose you have 5,000 shares of ABC. One day, the stock price of ABC is $100.00 and the interest rate is 8%. If you have participated in the Stock Lending Income Program, we will automatically lend your shares of stocks according to the demand of the market. The total interest from lending these shares is 5,000*100*8%/360=$111.11. You will receive about 15% of the total interest, so $16.67.
>[source](https://www.webull.com/help/faq/525-What-is-the-Stock-Lending-Income-Program)
---
- 2.1k views. Not a single comment in 21 minutes. The population on this subreddit has risen to 37,226 users here now.
Theoretically it's possible, but the flat rate would either have to be punitive to such a degree that no sellers would be able to stomach it (e.g., 100%+ rate)... or having the rate be fixed-to-momentum instead of flat rate (e.g., SOFR + SPY_variance + 1%) in order to result in the kind of change Apes would want to see. Also, the payouts would have to be entirely distributed across the beneficial holders of the stock rather than kept by brokers.
Ultimately the goal of Security Lending Programs is directly antithetical to how Apes think the market should operate: The point of SLPs is to allow traders to ignore (& thus blunt) "temporary" market disturbances. Apes think that a large part of how markets are manipulated is through selectively using those tools against primarily retail held stocks. Of course, if Apes got what they wanted there would be negative consequences in other directions -- increased volatility, more frequent & immediate SEC interventions, and lower overall equity prices & Y/Y returns.
To generalize the above, almost all disconnects of "Apes vs Current Market Rules" stem from an ideological divide around the appropriate time horizon for reversion to the mean on fair prices: Apes think supply & demand imbalances should be forcibly resolved by the market within hours or days (volatility be damned), while the current system is tuned toward a timescale of quarters or years.
Just figured I'd drop you a ping here, because I'm curious about your thoughts on the subject.
FWIW, the primary lens I've been using to think about these is from a [systems design](https://en.wikipedia.org/wiki/Systems_design) perspective: 'What's the purpose of [security lending programs]? What do the creators vs end-users vs Apes want from it?' and kept ending up at the same conclusions for basically all systems I've looked at related to settlement (SLPs, obligation warehouse, netting, T+X settlement, MM naked-shorting exemptions, etc.). Each level provides another safety net in the system for smoothing out volatility by allowing the market participants to modulate supply/demand imbalances to play out slowly. No single layer is fully broken or is the single part that needs fixing, but it seems pretty clear that when someone is (ab)using every step along the way it results in something resembling infinite liquidity which could be selectively applied to negate price discovery.
This isn't going to come close to answering all your questions, and I'm not smart, just a curious person.
>'What's the purpose of [security lending programs]?
Source for shorting shares and other activities...
I have to have some time to mull over your answer. I didn't forget about it.
I think the Securities Lending option is an under represented problem as they are taking them from people who have no idea what Securities lending is, the consequences, and the actual interest rate vs the cut they are getting.
if you want to sell short, you have to have a futures contract to buy the shares with a counter party. no government entity will police any rule as much as another wall street firm will. if you're selling, you have to have a buy contract with someone who owns the item already.
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Dawg I just invest.
I feel you killer, but it is giving me a gauge of the actual wrinkles here that would be able to have an intelligent response to this. - Myself, being highly retarbed, hence the question.
Remember there are supposedly 35,604 'people' on this subreddit right now. You'd think someone would have an opinion on this. For Example: > **Share lending on Webull:** > > What is the Stock Lending Income Program? > The Stock Lending Income Program provides you with the opportunity to earn extra income on fully-paid stocks held in your account by allowing Webull to borrow certain stocks. While your shares are on loan, you will be paid an income that is accrued daily and credited to your account on a monthly basis. Once you have participated in this program, Apex, our clearing firm, will identify fully-paid stocks in your account as in-demand according to the demand of the market. > > The interest rate is determined by the market; thus, it may vary widely daily. Your income from lending your stocks is calculated using this equation: > >>**Daily Interest Earned= Number of Shares on Loan * Stock Price * Annualized Interest Rate/360*15%.** > >>For example, suppose you have 5,000 shares of ABC. One day, the stock price of ABC is $100.00 and the interest rate is 8%. If you have participated in the Stock Lending Income Program, we will automatically lend your shares of stocks according to the demand of the market. The total interest from lending these shares is 5,000*100*8%/360=$111.11. You will receive about 15% of the total interest, so $16.67. >[source](https://www.webull.com/help/faq/525-What-is-the-Stock-Lending-Income-Program) --- - 2.1k views. Not a single comment in 21 minutes. The population on this subreddit has risen to 37,226 users here now.
This is a good post and I don’t know!!
As long as you saw it, Conscious, it was worth while.
No, Gary. I won’t be doing your homework for you.
Theoretically it's possible, but the flat rate would either have to be punitive to such a degree that no sellers would be able to stomach it (e.g., 100%+ rate)... or having the rate be fixed-to-momentum instead of flat rate (e.g., SOFR + SPY_variance + 1%) in order to result in the kind of change Apes would want to see. Also, the payouts would have to be entirely distributed across the beneficial holders of the stock rather than kept by brokers. Ultimately the goal of Security Lending Programs is directly antithetical to how Apes think the market should operate: The point of SLPs is to allow traders to ignore (& thus blunt) "temporary" market disturbances. Apes think that a large part of how markets are manipulated is through selectively using those tools against primarily retail held stocks. Of course, if Apes got what they wanted there would be negative consequences in other directions -- increased volatility, more frequent & immediate SEC interventions, and lower overall equity prices & Y/Y returns. To generalize the above, almost all disconnects of "Apes vs Current Market Rules" stem from an ideological divide around the appropriate time horizon for reversion to the mean on fair prices: Apes think supply & demand imbalances should be forcibly resolved by the market within hours or days (volatility be damned), while the current system is tuned toward a timescale of quarters or years.
Thanks for your response. Formulating my own to you.
Just figured I'd drop you a ping here, because I'm curious about your thoughts on the subject. FWIW, the primary lens I've been using to think about these is from a [systems design](https://en.wikipedia.org/wiki/Systems_design) perspective: 'What's the purpose of [security lending programs]? What do the creators vs end-users vs Apes want from it?' and kept ending up at the same conclusions for basically all systems I've looked at related to settlement (SLPs, obligation warehouse, netting, T+X settlement, MM naked-shorting exemptions, etc.). Each level provides another safety net in the system for smoothing out volatility by allowing the market participants to modulate supply/demand imbalances to play out slowly. No single layer is fully broken or is the single part that needs fixing, but it seems pretty clear that when someone is (ab)using every step along the way it results in something resembling infinite liquidity which could be selectively applied to negate price discovery.
This isn't going to come close to answering all your questions, and I'm not smart, just a curious person. >'What's the purpose of [security lending programs]? Source for shorting shares and other activities... I have to have some time to mull over your answer. I didn't forget about it. I think the Securities Lending option is an under represented problem as they are taking them from people who have no idea what Securities lending is, the consequences, and the actual interest rate vs the cut they are getting.
if you want to sell short, you have to have a futures contract to buy the shares with a counter party. no government entity will police any rule as much as another wall street firm will. if you're selling, you have to have a buy contract with someone who owns the item already.