Can you still buy or short a stock in IB, if you lending fully-paid shares of stock Programs?

[TradeTune]

Hi,

Lets say i have bought 100 shares of Tesla, and if IB lends my shares.
Can i still sell my 100 shares of Tesla? or can i go short another 100 Shares of Tesla?



**************************************************
Stock YieldEnhancement Program
Earn extra income by lending fully-paid shares of stock.
Program Overview


Earn extra income on the fully-paid shares of stock held in your account by allowing IBKR to borrow shares from you in exchange for cash collateral, and then lend the shares to traders who want to sell them short and are willing to pay interest to borrow them.

Each day that your stock is on loan, you will be paid interest on the cash collateral posted to your account for the loan based on market rates.

 

[d08]

Yes

 

[TradeTune]

Yes

Thank you

 

[Sig]

Hi,

Lets say i have bought 100 shares of Tesla, and if IB lends my shares.
Can i still sell my 100 shares of Tesla? or can i go short another 100 Shares of Tesla?



**************************************************
Stock YieldEnhancement Program
Earn extra income by lending fully-paid shares of stock.
Program Overview


Earn extra income on the fully-paid shares of stock held in your account by allowing IBKR to borrow shares from you in exchange for cash collateral, and then lend the shares to traders who want to sell them short and are willing to pay interest to borrow them.

Each day that your stock is on loan, you will be paid interest on the cash collateral posted to your account for the loan based on market rates.

You can't be long and short the same stock at the same time...at IB or any U.S. broker.

 

[TradeTune]

You can't be long and short the same stock at the same time...at IB or any U.S. broker.

No.. that's not the question, since it make no sense to be even short and long same stock.

I mean if you lend the stock that you have bought, can you still sell that stock and then short that stock in your account, if you taken part in stock lending program ?

 

[Sig]

No.. that's not the question, since it make no sense to be even short and long same stock.

I mean if you lend the stock that you have bought, can you still sell that stock and then short that stock in your account, if you taken part in stock lending program ?

Makes no sense but you see people on here insisting it does for forex all the time. Nonetheless, to answer your question then, you're fine selling it and then subsequently going short.

Keep in mind, there's nothing that says IB will actually lend your shares and as far as I know there's no way to really know they have except you'll see the line item for your split of the lending fee on your statement. And also keep in mind, you can't have purchased anything on margin and participate in the program, since as soon as you start using margin the general customer agreement at IB (and pretty much all brokers) gives them the right to lend your shares without telling you or sharing any of the lending fees. I'm not sure how a short position fits into that but if they consider that margin and you'd stop getting paid on any other stocks in your account once you went short on one.

Unfortunately you're talking about IB so if you call them to ask the person you talk to not only won't know about the program you're talking about but won't even grasp the question you're asking. Ideally they'll tell you that, but usually they just make up an answer. In this case, you won't be able to really check it because you could be participating in the program for years before they actually lend out one of your shares. You could purposely buy a single lot of something really hard to borrow to increase your chances that you'd be in the program to then run some tests I suppose. Alternately, if you want to capture the entire borrow fee instead of splitting it with IB and be 100% sure that you're getting the fee, you can replicate the position with options which have the fee baked into how much put/call parity is broken. Obviously only works with stocks that have listed options, but a much better way to go than hoping IB lends one of your stocks and then letting them keep half for doing nothing.

 

[TradeTune]

Makes no sense but you see people on here insisting it does for forex all the time. Nonetheless, to answer your question then, you're fine selling it and then subsequently going short.

Keep in mind, there's nothing that says IB will actually lend your shares and as far as I know there's no way to really know they have except you'll see the line item for your split of the lending fee on your statement. And also keep in mind, you can't have purchased anything on margin and participate in the program, since as soon as you start using margin the general customer agreement at IB (and pretty much all brokers) gives them the right to lend your shares without telling you or sharing any of the lending fees. I'm not sure how a short position fits into that but if they consider that margin and you'd stop getting paid on any other stocks in your account once you went short on one.

Unfortunately you're talking about IB so if you call them to ask the person you talk to not only won't know about the program you're talking about but won't even grasp the question you're asking. Ideally they'll tell you that, but usually they just make up an answer. In this case, you won't be able to really check it because you could be participating in the program for years before they actually lend out one of your shares. You could purposely buy a single lot of something really hard to borrow to increase your chances that you'd be in the program to then run some tests I suppose. Alternately, if you want to capture the entire borrow fee instead of splitting it with IB and be 100% sure that you're getting the fee, you can replicate the position with options which have the fee baked into how much put/call parity is broken. Obviously only works with stocks that have listed options, but a much better way to go than hoping IB lends one of your stocks and then letting them keep half for doing nothing.

Thank you so much for the insight.

 

[UVXY20]

Anyone ever try buying a high fee to short stock to lend out, like GUT, which costs 70% a year to short?

 

[Sig]

Anyone ever try buying a high fee to short stock to lend out, like GUT, which costs 70% a year to short?

GUT? As in the Gabelli Utility Trust? Not sure why a security as stable as that would cost that much to short?
In general if the stock has options you're much better off doing the synthetic using options. That way you'll get 100% of the short cost instead of giving half to IB for nothing, you lock it in for the term of the options as long as you hold to expiration, and you're sure you'll get it where as IB can decide to lend your stock out or not at their whim.

 

[frank317]

Makes no sense but you see people on here insisting it does for forex all the time. Nonetheless, to answer your question then, you're fine selling it and then subsequently going short.

Keep in mind, there's nothing that says IB will actually lend your shares and as far as I know there's no way to really know they have except you'll see the line item for your split of the lending fee on your statement. And also keep in mind, you can't have purchased anything on margin and participate in the program, since as soon as you start using margin the general customer agreement at IB (and pretty much all brokers) gives them the right to lend your shares without telling you or sharing any of the lending fees. I'm not sure how a short position fits into that but if they consider that margin and you'd stop getting paid on any other stocks in your account once you went short on one.

Unfortunately you're talking about IB so if you call them to ask the person you talk to not only won't know about the program you're talking about but won't even grasp the question you're asking. Ideally they'll tell you that, but usually they just make up an answer. In this case, you won't be able to really check it because you could be participating in the program for years before they actually lend out one of your shares. You could purposely buy a single lot of something really hard to borrow to increase your chances that you'd be in the program to then run some tests I suppose. Alternately, if you want to capture the entire borrow fee instead of splitting it with IB and be 100% sure that you're getting the fee, you can replicate the position with options which have the fee baked into how much put/call parity is broken. Obviously only works with stocks that have listed options, but a much better way to go than hoping IB lends one of your stocks and then letting them keep half for doing nothing.

Interesting. I started my IB account by depositing some fully paid stocks into my new IB margin account. Then I used a small amount of margin to buy some additional stocks (including more of the original stocks) and some other stocks. I am in the IB "Stock Yield Enhancement Program" for several months now and didn't received any lending fees yet, and was wondering why. So my using any amount of margin at all means IB can loan out any part of my holdings without sharing any fees with me? If so, using margin means the Yield Enhancement Program does nothing.