Why did he lend his shares?

You borrow someone%26#039;s shares and that someone is happy with their price.

You sell those shares at that price.

You spread a rumour which makes those shares drop in price.

You buy back those shares at the lower price.

You keep the money you%26#039;ve made.

Hand back the shares to the owner who can%26#039;t be happy that they%26#039;ve lost value?

Why did he lend his shares?heart rate

The lender of the stock receives a fee, also a trade can be cash collateral, non cash or cash, in other words the lender receives cash back as collateral in some cases.

Most of the lenders are big pension funds that have to hold baskets of stocks based on say the FTSE 100, Dow Jones etc etc, and how much each stock makes up of the index.

so yes, the price may go down, but these are long term players who earn cash on stock that is just going to sit in a depot. The lender is also entitled to recall the stock whenever they want.

The only other problem with stock lending is that it can impact liquidity as shares are sold that arent owned, just borrowed.

Why did he lend his shares?

loan

The true owner is probably a long term investor not concerned with the stock moves in the time frame that interests you. It takes all kinds to make a market.

Note: the person owning the shares probably doesn%26#039;t know he lent them. There is a clause in every margin account contract called %26quot;hypothecation%26quot; that lets the broker lend any shares in the account. There is no risk to the lender because the broker unconditionally guarantees the return of the shares on demand.|||The person or party you borrowed those shares from hasn%26#039;t lost any money.

Why? Because they haven%26#039;t sold those shares yet.

Granted, the shares lost value, but that trader hasn%26#039;t lost any money yet.

Thanks for asking your Q! I enjoyed answering it!

VTY,

Ron Berue

Yes, that is my real last name!