CynicAl Posted January 18, 2009 Share Posted January 18, 2009 Okay, so the institution is receiving a fee for lending out the shares, but this fee must be a lot lower than the shorter expects the shorted stock to fall or there would be no benefit to doing it. Now, is it just a case of risk versus reward for the lender, or is the fee there effectively to hedge losses that the lender already expects? Explanations in words of two syllables or less much appreciated..... Thanks Quote Link to comment Share on other sites More sharing options...
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