Monday, November 27, 2006

Does your broker pay you?

If not, maybe you can change that today.

Forbes spills the beans about how brokers loan your shares to short sellers and gets paid to do so. If you have the right broker, enough juice and ask - lots of ifs - you can share in your brokers' take.

Now here's Wall Street's dirty secret: Brokerage firms are free to lend out any shares that customers put in margin accounts, the kind of account that allows the customer to borrow against his securities. Take a look at the fine print on your brokerage application. If you see a line of credit attached you've probably got a margin account.
Forbes notes a couple brokerage firms that have programs that pay for their customers for the privilege of lending their shares - Smith Barney and Charles Schwab.

Hat tip to Forbes.

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