The stock doesn’t have to moon though, it just has to rise beyond the level of collateral during the day or the collateral to fall in value plus a failure of the counterparty for a loss to occur. More likely is a delay in settlement, where you may have wanted to withdraw the cash or buy something else but you can’t as the stock can’t be returned in time.
Either way the customer assumes the risk with no reward. This is the same reason I never moved my SIPP to FT.
Taking a step back, over the last two years FT has had three funding rounds, raised millions and the platform hasn’t improved much. Sure there may be a better cash turnaround time, I think a guaranteed price in a trade window, some kind of transfers in or out, but no tax reporting, or web app, or LISA or JISA, or auto invest, or pies etc.
It’s the customer who is being asked to pay more or risk more without any return. Then you have to weigh in the ultimatum of accept it or leave, which really doesn’t put FT in a good light. The recent FCA notices don’t help with that either. FT was supposed to be different and it isn’t working out that way.
I also think some of the statements are misleading:
Why lend shares?
Additional income
Opportunity to make an additional low risk income from long term assets.
It’s not the customer who get the “additional low risk income”. Anyway, my GIA is small and me closing it won’t make much difference to FT. Stopping my Plus account may have marginally more effect though.
At the moment it seems it’s better to be a shareholder than a customer.