TradeStation Securities, Inc.

What is fully paid lending?

TradeStation’s Fully Paid Stock Program gives you an opportunity to earn incremental income on your portfolio’s eligible stock positions. When we lend out certain fully paid or excess margin securities in your account, you’ll receive a share of the interest we earn each day.

Generate incremental income

While your shares are on loan, you’ll accrue daily interest, which is paid to your account once a month, in addition to the value of any dividend payments.

No long-term commitments

You can sell your securities on loan at any time.

Loans are secured

Rest easy knowing your securities on loan are backed by US dollar collateral held in a separate bank provided by TradeStation.

Tax considerations

You’ll receive cash payments in lieu of dividend payments while your securities are on loan. Although dividends from your securities are tasked at a different rate.

Here’s how the Fully Paid Stock Lending program works

When we lend out certain fully paid or excess margin securities in your account, you’ll receive a share of the interest earned each day. The interest rate is determined based on the demand in the lending market and the value of the security. The greater the demand for your securities, the higher your potential income.

See for yourself

Select one of the stock symbols below to see a hypothetical example of how TradeStation’s Fully Paid Stock Program works.

MITT
BXYL
RIOT
MITT
Shares on loan 1,000
Market price $4
Market value $4,000
Annualized lending interest rate* 22.5%
Annualized return $900
Daily Accrual ($4,000*22.5%/360 days) $2.50
Hypothetical monthly income ($2.50 x 30 days/month) $75
BXYL
Shares on loan 1,000
Market price $1
Market value $1,000
Annualized lending interest rate* 27%
Annualized return $270
Daily Accrual ($1,000*27%/360 days) $0.75
Hypothetical monthly income ($0.75 x 30 days/month) $22.50
RIOT
Shares on loan 1,000
Market price $3
Market value $3,000
Annualized lending interest rate* 9%
Annualized return $270
Daily Accrual ($3,000*9%/360 days) $0.75
Hypothetical monthly income ($0.75 x 30 days/month) $22.50

Ready to get started?

If you’re sitting on stock or ETF securities, fully paid securities lending could be an investment strategy to consider. It could add extra income to your portfolio — with little to no effort on your part.

Frequently Asked Questions

Who is eligible for Fully Paid Lending?

The Fully Paid Lending Program is available to all TradeStation clients who meet the following criteria:

  • A minimum of $25,000 in total net worth OR one (1) year of trading experience
  • An equities account (excluding custodial)
  • A Master Securities Lending Agreement (MSLA) and related schedules and disclosures. Have questions about your eligibility? Contact Client Services at 800.822.0512 or 954.652.7900.

How do I enroll?

All newly qualified clients are automatically enrolled in the program. Clients who opened an account before 2/15/19, visit the Client Center to enroll in the program. For existing clients whose eligibility criteria has changed, please complete and submit the Client Information Update form and then visit the Client Center to enroll.

How does it work?
  • We identify securities in your account that qualify for lending.
  • Based on market demand, some or all of your eligible securities will be loaned out.
  • You’ll accrue daily income while your securities are on loan.
  • Once securities on loan are sold or if the loan is recalled, income stops accruing to your account on that loan.
  • All securities on loan and accrued interest will be reflected in your monthly statement.

Are there trading restrictions?

There are no trading restrictions on securities that are loaned out. You can sell or transfer your positions at any time, just as you would if they weren’t on loan. As required, shares will be recalled and deposited back into your account.

What Are the Risks?

Shares lent out are not protected by SIPC.

Tax considerations:

  • When shares are lent out, you’ll receive cash payments in lieu of dividends; these payments are treated as ordinary income rather than taxed at the dividend rate.
  • Loan income is taxed as ordinary income.
  • There’s no guarantee that your portfolio’s eligible securities will be lent out, as there may be no demand for the securities.

When securities are on loan, you lose your ability to exercise voting rights. Other risks are outlined in the Fully Paid Lending Risk Disclosures.