RE: Sandbar increase short again15 Jan 2021 17:55
Also, if Citadel Advisors LLC were to drop their 0.48% last seen on the 21-December-2020, they will do it
by directly declaring the drop or increase up 0.49% and still we wouldn't know about is as its a private
agreement between hedge funds and FCA.
Hedge funds borrow shares from anyone who owns the shares directly. So, they could had borrowed these from the Capita current major shareholders who will receive an interest earning plus cash as a collateral.
According to the Ortex website, the interest that is paid to a lender of Capita shares is around 5% for the amount of shares borrowed with valuation based on the agreed share price at the time of lending.
Example: If Schroders was to lend out 20millions Capita shares at 38p, they would in theory be able to get at least 2.5% interest over £7,600,000.00 worth of capita shares at 38p. for the period that the shares remain lent out. They can also recall their shares at anytime. The hedgefund shorter will then try to sell them at their chosen price that they think it will drop to if they have done their homework right obviously. This is how then swaps take place between different institutional investors. Very dirty business IMO.
If any of you got a few millions of shares, here you can lend them out an earn half of the interest going rate.
The other half goes to the agency that does the arrangement between the lender and the borrower.
For example the interest rate for borrowing Cineworld shares is about 9.5% while premier oil is 14%.
So the agent that does the transaction get a good deal with Cine and PMO. The longer they remain borrowed
the more the lender and the agent earns.
Here is the interactive brokers lending sign up if you have a minimum of £50k or equivalent in stocks.
[Earn extra income by lending fully-paid shares of stock.] by Interactive Brokers
https://www1.interactivebrokers.com/en/index.php?f=46942
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