Stats › Active, passive and flows › Securities lending
91% of borrowed stock costs 17 basis points a year
| Segment | Cost to borrow, a year |
|---|---|
| All stocks | 0.24% |
| General collateral | 0.17% |
| Specials | 4.69% |
| Negative rebate | 19.0% |
The distribution is bimodal. Almost everything costs nothing and a small minority costs a great deal. Source: D'Avolio, Journal of Financial Economics, sample April 2000 to September 2001.
Short selling requires borrowing a share first, and long term holders supply it for a fee. In the canonical study 91% of stock on loan was easy to find, at 17 basis points a year. The 8.7% classified as special averaged 4.69% a year.
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