Robinhood, a US Trading company that catalyzed the use of commission-free stock trading on Wednesday announced its official launch of the Stock Lending program. The company targets to embrace a ‘democratized approach’ to paid securities lending; information is sourced from its platform page.
The dynamic suggests that a Robinhood client can enable Stock Lending by granting credit for fully paid stocks. The programming of the company’s app allows the clients to track earnings in the dashboard, see their positions, and enable or disable Stock Lending at any given time.
“Our version of Stock Lending empowers customers to put their investments to work while keeping it simple. Robinhood does the work of finding borrowers and managing transactions while customers can add a potential source of passive recurring income to their portfolio. We’re excited to break down yet another barrier and democratize a product that has been historically preserved for the wealthy with high barriers to entry,” Steve Quirk, Chief Brokerage Officer at Robinhood, said.
However, some distinct sectors will not be supported by the Stock Lending program. These include Fractional shares, as well as shares held in an account with a margin balance.
“Fully paid securities lending is a demand-driven business, meaning that securities with limited supply have greater potential to be loaned out and the potential to yield greater returns than securities where supply is more liquid,” Robinhood noted.
Ziglu-Robinhood Deal
The Stock Lending strategy comes barely a week after Robinhood clicked a deal with Ziglu. The two platforms share a common set of goals, working to reduce the barriers to entry for the new generation of investors.
The deal came amid the expansion of the platform in the UK and Europe, as plans were put in pending two years ago.
“Like Robinhood, Ziglu believes that the new era of digital money brings a multitude of opportunities, and Ziglu exists to make those opportunities accessible to everyone. Their talented team and technology will help us accelerate our international expansion, both in the UK and across Europe,” the company stated.
