Introducing share lending at Freetrade

Freetrade Chat đŸ”„
41

Can we have ‘Share lending’ as a tab on the app rather than going into your profile to see the ‘snapshot’?

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42

Are for example Vanguard ETFs or iShare ETFs included in the share lending program or it needs to be single stocks?

43

Thanks for the update, Jachym! The share lending program sounds interesting. I’ll review the terms in the app and decide if I want to opt in. Good to know Freetrade covers any potential shortfalls. Looking forward to more details!

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44

Wow, this is going to be really good. You don’t find share lending that often.

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45

The rates are a fair bit lower than in my second example, that’ll be due to the safety since the counterparty posts collateral worth 105%. It’ll be a good question for Viktor on what they expect, it must be meaningful considering all the work involved!

Yes, except it says for the low risk ETF’s. (Side point, a lot of the ETF’s do Share Lending of their holdings).

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46

Any chance we could toggle on or off share lending for specific stocks? I don’t really mind being responsible for downward pressure on price for my ETF and staples (e.g. BRK), but I’d like to have the choice on my long positions on my more speculative stocks (even though I know I have a minimal impact).

47

Hey @Gabs, unfortunately we don’t offer the functionality to toggle opt-in between specific instruments.

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48

Hi @Jachym, thanks for your reply. I imagine there are definitely other priorities for feature rollouts, but it would be great to have that option in the future.

Thanks !

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49

I’d be interested in hearing about the decision process of making it opt-in vs opt-out. Opt-in is more user-friendly, but when you’re only earning £20 a month on a £100k portfolio, for example, it doesn’t seem worth opting in. Maybe this should have been spun primarily as an opt-out money-earner for freetrade so they can continue offering their commission-free trading.

50

How about this. A 200% discount on platform fees, does that sound more appealing?

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51

It was originally pitched as an opt out, get out, pack your bags and leave, we are shutting your account down.

This is much more sensible approach.

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52

Alex, i was pushed out of Freetrade a couple of years ago when customers were forced to either sign up to compulsory share lending or effectively close their accounts. I lobbied hard on the forum for this to be made optional, for FT to guarantee no customer losses and for commission to be shared. All these points were met at the time with a FT brick wall. You and i corresponded directly on the subject. I’m interested to see that all these safeguards now seem to have been implemented. Why the U turn ? If i were to consider moving my SIPP back to FT, what assurances could you give that the option of share lending would not be removed and it would not become compulsory again in future? Thanks

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53

It could of been the old CEO not going for it and the new CEO was for it or many other things. Maybe Alex can pm you directly to let you know or maybe we can get told directly who’s idea it was to go through with it in the end?

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54

Hey @Engelbert1969

Thanks for your question. Of course I remember our discussions and appreciate you raising this as it’s important.

We received a lot of feedback about our initial share lending model following that roll out of our terms a couple of years ago. We didn’t get it right that time and we heard you (and many others) who wanted to see a different model implemented.

That’s what we’ve done here by giving customers a choice to opt in (only if they want to) and to receive 50% of gross income in exchange for participating.

We’re absolutely not going to change our model back to what we had before (i.e. a model with no revenue share and forced opt-in). I hope that’s clear enough and provides an assurance. It’s best that this is posted publicly to give you some added comfort and clarity :smiley:

As a side note, too, if you were to transfer back your SIPP to us, we’ve currently got a 1% cash back offer live which you would benefit from (Freetrade | 2024 SIPP transfer offer).

Let me know if you have any other questions.

Alex

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55

Thanks Alex. Good to see this moving on in a good way.

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56

i dont like the idea of my shares being lent for short selling so wont be taking part
10p/mth for every ÂŁ1000 lent; you might as well invest in a decent dividend stock, that is proper passive income

57

Invest in dividend stock, lend shares, get more than just dividend stock.

But I get what you mean. Everyone’s needs are different, in theory if you are confident in your investment then short selling isn’t going to be an issue. But different needs for different people

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58

(Apologies if this is covered in the FAQ but I couldn’t find it) If a share I own is lent out, can I still sell it instantly (while the market’s open)?, or would there be a delay while it was returned first? @Jachym

59

I moved away from Freetrade due to the original plan of forced share lending. I’m happy to see this opt-in model. This is far more reasonable. I will consider moving back to Freetrade now.

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60

Hi @rod

You would sell as normal and you’ll notice nothing different on your app. It would register as a sell instantly if the market is open and you would have unsettled cash available to make another purchase immediately.

Share lending happens entirely in the background and has no impact on how you typically trade.

Best
Alex

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