It depends on what shares you are āloaningā out. If you hold apple, tesla, nvidia etc you might be making some good income with relatively low risk, for growth stocks you are destroying your own holdings. Truly donāt understand why anyone would choose to do so.
Not sure I understand you @Gliese14G , surely thereās only really two logical reasons to hold a share in a companyā¦ capital growth and/or dividends, both of which you get from being part of share lending, am I missing something?
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No, you are undermining your capital growth by āloaningā out your holdings (on the cheap) to shorters that will ultimately make the real profits (at your expense) in the long run. Unless you are on to a real winner. No right or wrong, just give it some thought on a case by case basis.
From what Iāve read, the research tends to find that restricting short-selling makes it more likely that stocks will become overvalued, followed by a slump in price. We might think, "Great, Iāll sell when itās overvalued, " which is easier said than done! We also run the genuine risk of buying when itās overvalued.
I believe that if Iāve picked good companies, their price will appreciate in the long run as their results do. In that case, shorts might make money in the short term, but they wonāt affect the long-term result negatively. I, therefore, may as well pick up some additional income from them.
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Couldnāt have put it better my self @Anders
The shorts have a different opinion to me but they likely also have different time horizons or capital requirements. Iām confident in my choices
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Dont go spending all that at once now will you!
Ive been lending shares of THG for a couple of monthās and not seen a penny @acamp
I received my first share lending income of 1p in December, then 2p about 2 weeks ago. Then received 48p the other day - bit of a surprise as I dont really hold that much but income is income
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I received a survey about share lending.
The thing is, when you erode trust, it casts doubt over every risky aspect of your offering. And so far, Freetrade has done nothing to rebuild trust. Focus on that first.
Also, do Freetrade actually listen to feedback(?)
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Yes in my experience they do. I believe share lending was going to be compulsory initially, but they switched it to optional due to the community feedback. You can turn it off if you donāt want to participate. They do read and participate in this forum too.
My income from this is has been growing each month, Iāve bought in on some companies going through tricky patches and donāt mind if they get knocked down as I keep buying. In fact, I think the shorts may be in a loss on some of them, as there has been dramatic jumps in price. Worse case, itās better prices when DCAāing, after all, even shorts have to exit at some point and that pushes a bigger rebound when good news comes in.
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