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JOIN OUR StockYield Program
Interactive Brokers offers a program that allows you to earn additional income from the fully paid shares in your account. Instead of the shares simply sitting unused, you can choose to let Interactive Brokers borrow them and provide you with cash collateral in return.
After receiving the shares, Interactive Brokers lends them to traders who need them for short selling and who pay interest to borrow them. This interest is the source of the income generated through the program.
For every day your shares are on loan, you receive interest calculated on the value of the cash collateral held for you, and the rate is determined by current market conditions.From the total income earned on lending your shares, Interactive Brokers credits you with 50%.
The program is open to eligible clients who have been approved for a margin account or who hold a cash account with equity above USD 50,000 (or equivalent).
- Simple and Seamless
Interactive Brokers’s program is designed to run in the background with almost no effort from your side. After you enrol, Interactive Brokers reviews the fully paid shares in your portfolio and identifies those that are currently in demand. When suitable shares are found, Interactive Brokers borrows them, adds the required collateral to your account, and makes the shares available to the lending market.
- Transparency
Throughout the process, you can easily see what is happening. Your account reflects the shares that are on loan, the interest rate you are earning on the cash collateral, and the revenue Interactive Brokers receives from lending those shares. This level of visibility is uncommon among brokers offering similar programs, where the actual market rates are often hidden and clients receive only a small portion of the income.
- Extra Income Potential
While your shares are loaned out, you earn interest every day, calculated according to the market rate and based on the value of the collateral held for you.
- Freedom to Trade
Even when your shares are on loan, you remain the owner. Any price movement continues to affect you, and you can close your position at any time. Selling the stock is fully permitted, and you can exit the program whenever you choose, with no restrictions.
XYZ is currently trading at USD 75.00/share. You own 5,000 shares of XYZ, with a market value of USD 375,000.00. XYZ is in demand and commands a loan interest rate of 9%.
You sign up for Interactive Brokers's Stock Yield Enhancement Program, and Interactive Brokers loans out your 5,000 XYZ shares at 9%. Interactive Brokers will pay interest on the U.S Treasury or cash collateral of USD 375,000.00 x 4.5% = USD 16,875.00.
You could earn USD 16,875.00/year on stocks you already own.
*All interest rates shown are annual
- Eligibility
This program is open to MEXEM clients who meet the eligibility requirements—either those approved for a margin account or those holding a cash account with more than USD 50,000 (or the equivalent in another currency).
Only fully paid shares, meaning stock that is not held on margin, can be included in the lending process.
Shares on Loan May Not Fall Under ICS Coverage
Interactive Brokers provides cash collateral equal in value to the shares you lend, offering protection in the unlikely case that the borrowed shares are not returned.
Loaned Shares Are Often Used for Short Selling
Your shares may be in demand because traders want to borrow them to short the stock, which can potentially influence the share price.
Loan Rates Can Shift Frequently
Interest rates in the lending market can rise or fall significantly, meaning the income you receive may vary by 50% or more.
Interactive BrokersMay End a Loan at Any Time
There is no guarantee that all eligible shares will be lent out, and Interactive Brokers may choose to stop a loan whenever necessary.
Voting Rights Move to the Borrower
While your shares are on loan, you cannot vote on shareholder matters related to those positions.
Selling or Borrowing Against Your Shares Can End the Loan
If you sell the loaned shares, use them as collateral, or withdraw cash from a margin account in a way that changes their status, the loan ends
and interest payments stop.
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