No. of Recommendations: 4
Anyone can correct me if I'm wrong but if you have a margin account the broker can loan your shares and profit from that.
I think you are right but I can’t think why that should bother a client.
One reason it might bother a client, at least in the US, is that if the company pays a dividend that would normally be qualified while the shares are loaned out, the client still gets the dividend, but the dividend loses its qualified status, meaning it's taxed at a higher rate. Some brokers will make up the difference, but I don't think all, so it's worth checking for that if you're in the US and own shares that normally pay qualified dividends.
Brian
