Suppose I have a brokerage account and I am long on a stocks very heavily and there are short sellers who need this stocks from my broker. There are two ways a stock broker can lend securities held in an account.
- from an account that has securities lending and is long on position
from any margin account that has the long position
I assume if the investor just has margin ( but not Security lending) enabled on his/her account , he/she does not receive the lending fee on his/her long position that was borrowed by the broker( to lend to some other customer )
But if the investor has margin and also Security lending, then the broker will be paying the lending fee to the investor who is long if his/her position is being borrowed.
So the question is what an investor is giving up to get that additional lending fee?
I could not find much on internet. and also without opening an additional account, if I can find, What are the pros-cons and differences and similarities between Securities lending and Margin?