Can E*TRADE Lend My Shares?

Can E*TRADE Lend My Shares?

Share lending is a lucrative business that requires little to no effort on your part. The process is made even easier with the help of E*TRADE’s Fully Paid Lending Program. Can you lend your shares vis E*TRADE?

E*TRADE offers the Fully Paid Lending Program through which you can lend your shares to short sellers in 4 simple and easy steps. E*TRADE helps you earn extra income by borrowing your fully paid securities and re-lending them to short sellers.

This article will shed light on E*TRADE’s Fully Paid Lending Program and how you can lend your shares through this program. I will also address the question of loan termination.

What Is the E*TRADE Fully Paid Lending Program?

E*TRADE offers you to lend your shares through its Fully Paid Lending Program. Once you enroll in this program through an eligible account, E*TRADE borrows your fully paid securities if and when they become lendable due to high demand and lends them to other investors. 

In return, you are guaranteed daily interest at an annualized interest rate that is added to your account at the end of each month.

How Can You Lend Your Shares Through E*TRADE?

There are 4 simple steps for lending your shares through E*TRADE:

  1. Apply to the program: Enroll in the program by applying online through your eligible account. 
  2. Review and agree to the terms and conditions specified in the agreement: Before you submit your application, make sure to read the detailed agreement and risk disclosure.
  3. Allow E*TRADE to borrow and re-lend your shares: The acceptance of your application means that you allow E*TRADE to borrow your fully paid share. When your securities are in high demand, E*TRADE will borrow them from your account. You will be notified whenever your shares are borrowed.
  4. Earn credit: You earn through cash collateral and interest payments. The daily interest is calculated on an annualized rate, and it is paid out to your account in credit every month. You can check your accrued interest and rate within the Reports tab of your transaction history.

Am I Allowed to Select Which Securities to Lend?

No, you are not allowed to select the securities. Once you agree to the program, E*TRADE reserves the right to borrow high in demand shares of securities from your portfolio. However, you are entitled to the revenue earned from these shares.

Do I retain ownership of my securities?

You retain full ownership over your securities and can sell them whenever you want. You can also disenroll from the program whenever you like. You can continue to trade as usual, and the shares are subject to the same market fluctuations. 

However, it must be noted that selling a position on a loan or writing a covered call on an underlying position effectively terminates the loan.

When is the loan terminated?

Your loan is terminated:

  • At the discretion of E*TRADE
  • When you sell your underlying shares
  • On writing a covered call
  • When you unenroll from the program
  • When you transfer your shares to an unenrolled account

Make sure you contact customer support before trading or transferring your shares internally or externally.

Conclusion

Lending your shares via E*TRADE is simple and easy. E*TRADE takes care of the whole process for you. All you have to do is enroll yourself in its Fully Paid Lending Program and earn credits monthly.

Apply now and start earning!


Current recommendations:

Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:

P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!

1) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!

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