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Stock Yield Enhancement Program

Stock Yield
Enhancement Program

Earn extra income by lending fully-paid shares of stock.

Program Overview

Earn extra income on the fully-paid shares of stock held in your account by allowing IBKR to borrow shares from you in exchange for cash collateral, and then lend the shares to traders who want to sell them short and are willing to pay fees to borrow them.

Each day that your stock is on loan, you will be paid fees on the cash collateral posted to your account for the loan based on market rates.

 

IBKR pays you 50% of the income it earns from lending the shares.

The program is available to eligible IBKR clients1 who have been approved for an investment loan account, or who have a cash account with equity greater than USD 50,000 (or equivalent).

 

Benefits

Simple and Automatic

IBKR manages all aspects of share lending. Once you enroll, IBKR will examine your fully-paid stock portfolio automatically. If you have stocks that are attractive in the securities lending market, IBKR will borrow the stocks from you, deposit collateral into your account and lend the shares.

Complete Transparency

When your stock is loaned out, you will see the fees rate that you are being paid on the cash collateral along with the amounts earned by IBKR from lending those shares. Other brokers with similar programs generally do not disclose the market rates to you, which allows them to pay you a small piece of the pie while holding on to most of the profits.

 
Earn Supplemental Income

Each day that your stock is on loan, IBKR pays fees on the cash collateral directly into your account.

Trade Your Loaned Stock with No Restrictions

You will see the loaned shares on your account statement, indicating that they are being loaned out. You are still the owner of the stock, which means you continue to have market risk and will recognize any profit (or loss) if the stock price moves. You can sell your shares at any time without restriction and can terminate your participation at any time for any reason.

 

Eligibility

The Stock Yield Enhancement Program is available to eligible IBCE clients1 who have been approved for a margin account, or who have a cash account with equity greater than USD 50,000 (or equivalent).

Stocks that are eligible to be loaned out are all "fully-paid" stocks (stocks not held as collateral to an investment loan or derivatives margin requirement) and "excess-collateral" stocks (stocks held as collateral to an investment loan or derivatives margin requirement but whose market value exceeds 120% of your investment loan balance).

 
SYEP eligibility

Considerations and Risks

Shares loaned out may not be protected by BEVA.

The Investor Protection Fund may not protect shares loaned out. This is why IBCE provides you with cash collateral in the same amount as the value of your shares to protect you in the very unlikely event that the stock is not returned to you.

Shares loaned out are typically used to facilitate short sales.

Shares are attractive in the stock loan market because other traders want to borrow and sell them short, possibly affecting the value of the shares.

Loan rates change frequently.

These rates and the fees you will receive may go down (or up) by 50% or more.

 

Loans may be terminated at any time by IBKR.

Also, IBKR does not guarantee that it will lend all eligible shares.

Voting rights go to the borrower.

During any period in which your securities are loaned out, you will forfeit your right to vote those shares by proxy.

Selling your shares or borrowing against them in a margin account will terminate the loan transaction.

If you sell the fully paid shares that have been lent out, or if you borrow the shares or withdraw cash in an investment loan account (such that the securities become loan collateral and are no longer fully paid or excess margin securities) the loan will terminate and you will stop receiving loan fees.

 

For More Information

  • For a complete discussion of the risks and characteristics of the program, click here.
  • Sign up for IBKR's Stock Yield Enhancement Program on the Account Settings configuration table in Client Portal.
 
  • For more information, see our FAQ page.

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