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Securities Lending and Borrowing

Trading Course
Level Advanced

This course is aimed at helping investors wanting to take a short position in stocks understand what to do and where to find key information in Trader Workstation. We explain the short selling cycle and how investors can easily find out stock loan availability in the platform.

In a normal short sale transaction, Interactive Brokers does not arrange to borrow stock on the client’s behalf until settlement, also known as T+2. In the case of a preborrow, Interactive Brokers will attempt to borrow stock on the client’s behalf the day the pre-borrow request is submitted.

Did you know that Interactive Broker clients may earn additional income on their fully-paid shares by lending those shares to Interactive Brokers for on-lending to short sellers that are willing to pay to borrow them? Join us as we explore IBKR’s Stock Yield Enhancement Program.

The mechanics behind short sale transactions are detailed one step at a time to help viewers understand what the investor must do, and more importantly, what their broker must do to prevent the trade from failing.

Understanding the role of Regulation T of the Federal Reserve Board may help viewers better understand the concept of margin for short sellers. This lesson neatly summarizes the key concepts and requirements facing investors wanting to sell short stocks at Interactive Brokers.

Investors interested in short-selling trends may analyze the Securities Lending market by accessing data on what other market participants are doing currently and with historical trends. Investors can see relative positions within the investment community along with how hard or easy a stock is to borrow, and what those metrics were in the past.

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