This is a program offered by Motley Fool Wealth Management's custodian Interactive Brokers.
This shows up on your statement as Securities Lent or Securities Lending Program.
On your behalf, Interactive Brokers lends out securities you own to other investors looking to short them. The investor doing the shorting pays interest for the securities he or she borrows. Our arrangement with Interactive Brokers means you receive 65% of the proceeds of those interest payments and Interactive Brokers receives the remaining 35%. For context, many other broker keeps 100% of these proceeds themselves. The interest rates you receive for each security lent are dictated by supply and demand in the market, and thus vary for each security and each day.
The Stock Yield Enhancement Program can add returns of your Personal Portfolio, and its available to all of our clients.
You have to "Opt In" to this feature during the application process.
Those that do are agreeing to lend out their securities to short sellers in the market to collect a small amount of extra income.
There are pros and cons to this strategy, so please familiarize yourself with the program intricacies. If you'd like to talk to a member of our team about whether it is right for you, don't hesitate to call us at 877-629-8542.