Clearing firms commonly lend stocks to other financial institutions, through the securities lending market, as a means to facilitate short selling, meet collateral requirements, and other settlement purposes. The Securities Lending Income Program provides you with the opportunity to earn extra income on fully paid stocks that you hold which are completely paid for and are not being used as collateral for other purpose. This program allows you to lend certain fully paid stocks to Firstrade’s clearing firm, Apex Clearing.
In return, you will earn daily interest based on an annualized rate with interest paid out to you on a monthly basis. Although the loaned securities are not eligible for SIPC protection, a cash collateral equal to the dollar amount of the stocks borrowed will be deposited on your behalf into a reserve account held by Apex Clearing. The collateral is adjusted daily on a mark-to-market basis. It is calculated by multiplying the previous closing price of the security by 102% (rounding it up to the nearest dollar), then multiply by the number of shares of stock on loan.For example: If you loaned 10,000 shares of ABC stock and the closing price of ABC is $25, the mark-to-market calculation would be $25 X 1.02 = $26.25, then round it up to the nearest dollar = $26 X 10,000 = $260,000.$260,000 cash collateral will be held by Apex Clearing for continual mark-to-market adjustments.
Brokerage Products and Services offered by Firstrade Securities, Inc.Review Firstrade’s brokerage services with.Online trading has inherent risk due to system response and access times that may vary due to market conditions, system performance, and other factors. An investor should understand these and additional risks before trading.
Fully Paid Lending Program Risks
Carefully consider the investment objectives, risks, charges and expenses before investing. All investments involve risk and losses may exceed the principal invested. Past performance of a security, industry, sector, market, or financial product does not guarantee future results or returns. Firstrade is a discount broker that provides self-directed investors with brokerage services, and does not make recommendations or offer investment, financial, legal or tax advice.Options trading involves risk and is not suitable for all investors.
Options trading privileges are subject to Firstrade review and approval. Please review the brochure and before you begin trading options.ETF trading involves risks. Before investing in an ETF, be sure to carefully consider the fund's objectives, risks, charges, and expenses. Please read the prospectus carefully before investing. Leveraged and Inverse ETFs may not be suitable for long-term investors and may increase exposure to volatility through the use of leverage, short sales of securities, derivatives and other complex investment strategies.Investors should consider the investment objectives, risks, and charges and expenses of a mutual fund or ETF carefully before investing.
Securities Lending Times
Leveraged and Inverse ETFs may not be suitable for long-term investors and may increase exposure to volatility through the use of leverage, short sales of securities, derivatives and other complex investment strategies. A mutual fund or ETF prospectus contains this and other information and can be obtained by emailing.Margin trading involves interest charges and risks, including the potential to lose more than deposited or the need to deposit additional collateral in a falling market. Before using margin, customers must determine whether this type of trading strategy is right for them given their specific investment objectives, experience, risk tolerance, and financial situation. For more information please see,.
These disclosures contain information on our lending policies, interest charges, and the risks associated with margin accounts.Online trades are $0 for stocks, ETFs, options and mutual funds. See our for detailed pricing of all security types offered at Firstrade. All prices listed are subject to change without notice.Any specific securities, or types of securities, used as examples are for demonstration purposes only. None of the information provided should be considered a recommendation or solicitation to invest in, or liquidate, a particular security or type of security.This is not an offer or solicitation in any jurisdiction where Firstrade is not authorized to conduct securitiestransaction.System response and access times may vary due to market conditions, system performance, and other factors.©2019 Firstrade Securities Inc. All rights reserved.