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They don't "just take" it, it gets lent out to them by your broker, who charges the shorter a fee for this. This fee (amongst other things) subsidizes your free
by WJW 5y ago
They don't "just take" it, it gets lent out to them by your broker, who charges the shorter a fee for this. This fee (amongst other things) subsidizes your free account and low trading costs. For large investors it is possible to share in this income, though not via one of the currently popular retail brokers as far as I'm aware.
- _trampeltier 5y agoSome broker do this, when customers don't even know about it and also get no lending mony.
- WJW 5y agoCustomers who have not read the terms and conditions of a service they are using to store a significant part of their net worth you mean? Every broker I have ever seen very clearly lists in the T&C that they do this.
- _trampeltier 5y agoIt was even a discussion here on HN because of an broker frome Sweden ord Norway (I don't remember). So no, it is not allways clear. And no, you may don't own the stock.
- nly 5y agoMost brokers here in the UK have an annual custody fee of say 0.25%, capped at some fixed amount per quarter. Trading tends to be expensive though, say $14/trade.