When your securities are lent out, interest accumulates daily and is automatically credited to your account on a monthly basis. The interest you receive depends on the demand for the loaned shares. Hereâs an example of how your earnings are calculate:
Shares on loan: 2,000
Market price: $20
Market value: $40,000
Annualized lending interest rate: 9.00%
Daily accrual ($40,000 x 9.00% / 360 days*): $10.00
Your hypothetical monthly income ($10.00 x 30 days): $300.00
*Disclaimer: Interest accrual is based on a 360-day financial year, a standard billing practice. Actual earnings may vary.
Please read Important Risk Disclosures With Respect To Participating In Fully Paid Securities Lending Transactions carefully before deciding whether to participate in lending Fully Paid Securities or agreeing to enter into a Master Securities Lending Agreement with Alpaca Securities LLC.
These disclosures describe important characteristics of, and risks associated with engaging in, securities-lending transactions.
All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. There is no guarantee that any investment strategy will achieve its objectives. Please note that diversification does not assure a profit, or protect against loss. There is always the potential of losing money when you invest in securities, or other financial products. Investors should consider their investment objectives and risks carefully before investing.