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Maybe you misunderstood my point. I'm not some sort of Fidelity fanboy, I was just pointing out that for any significant short position, 200% interest is going to cost you tens or even hundreds of dollars a day. $1 commissions is not going to make up for that. On the flip side, I'm considering switching to IB instead of Fidelity because (from what I've seen on this thread) it looks like I'd earn somewhere between 1.3x to 2x more loaning out my shares there.Because you only pay less than $1 in commision as a private investor at IB, if you have a huge amount of trades, you may choose a fixed fee, that is far below that.
Maybe you misunderstood my point. I'm not some sort of Fidelity fanboy, I was just pointing out that for any significant short position, 200% interest is going to cost you tens or even hundreds of dollars a day. $1 commissions is not going to make up for that. On the flip side, I'm considering switching to IB instead of Fidelity because (from what I've seen on this thread) it looks like I'd earn somewhere between 1.3x to 2x more loaning out my shares there.
On the flip side, I'm considering switching to IB instead of Fidelity because (from what I've seen on this thread) it looks like I'd earn somewhere between 1.3x to 2x more loaning out my shares there.
More small bumpage at Fidelity:
Lend TSLA: 10.0%
Short TSLA: 21.5%, 0 shares available to short
Lend SCTY: 46.0%
Short SCTY: 82.0%, 0 shares available to short
+1 -- I did the same thing for the same reasons...This also brings up what seems like a side benefit of @jhm s recently posted trade about converting shares of TSLA to shares of SCTY: IB is paying a lot more to lenders of SCTY than lenders of TSLA, so you stand to make some additional gains there as well.
For what it's worth @adiggs I did exactly what you're talking about a few months ago, but for slightly different reasons (was hoping to use my TSLA holdings as margin collateral so I could capture occasional market dips -- didn't realize at the time that TSLA is one of the few stocks that IB requires 100% margin and you can't use it as collateral. Whoops...).
As a data point of what to expect, I have ~925 shares of TSLA with IB and maybe 60-70 shares of SCTY. Their share lending program nets me roughly $40 a day (except for yesterday for some reason where I got $58).
This also brings up what seems like a side benefit of @jhm s recently posted trade about converting shares of TSLA to shares of SCTY: IB is paying a lot more to lenders of SCTY than lenders of TSLA, so you stand to make some additional gains there as well.
Just messing around on Fidelity tonight, found a list of ETFs that have TSLA in their portfolio. There were a bunch of funds shorting TSLA, and they all had lifetime ROIs that looked like this (SQQQ):
Not only will this fund turn your $10,000 into about $100 in 6 years, it will do with an expense ratio of almost less than 1% (1.05% gross expense ratio).
There are a ton of these winners - SQQQ, QID, SZK... PSQ is a pretty good one: your $10,000 is still worth about $2500 10 years later (-14.6% annual return over lifetime of the fund). Then there's HDGE which thinks pretty highly of itself - a -15% annual return over its 5 year life and only a 2.9% expense ratio.
Seriously - who is investing money in these funds? Is it some kind of money-laundering (money-shredding?) scheme? I guess enough people believe the apocalypse is right around the corner to support them (though I'm not sure exact what money will buy you post-apocalypse...).
Someone pointed out that those funds may only be used sporadically, when you think the indexes are going to take a big hit. That would make sense if they had assets close to $0 most of the time, but QQQ has assets of $439.19M, so it sure seems like some doomsayers are in it for the long haul. Of course, eventually they'll be right. But like the shorts paying 20% and 80% (sometimes 200%) to short TSLA and SCTY, they could easily lose their shirts before then..