Recently got an email from Zerodha about them starting SLB.
want to understand how the process works.
Will appreciate any feedback on kind of fees, any strategies etc.
Which other broker does SLB??
Thanks.
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I doubt it will be for retail customers. Few years back Edelweiss was offering this facility. If you have long term holdings which you don’t want to sell and want to get interest on it by lending then you should opt for SLB. You are still entitled to get dividends and bonuses. I guess it is generally used by institutional clients for F&O and short trades.
Here is a information link from Zerodha
i had seen this article before.
Zerodha reached out a few days back and they said they are starting this. I wasn’t even sure it was genuine. I reached out to them via Twitter and they said it is accurate.
Will update if I go through with it.
It is for retail customers. We have a brokerage house and we can help you. You can even lend 1 share. A few of our customers have made reasonable sums of money with this lending stocks like IGL and TVS motors.
Mostly retail clients use it for lending and not for borrowing.
In case more details are required, DM me
Please share your experience of this product once you start using it
I will DM you. just after I figure it out.
Have you gone through with it?
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Hi, curious if anyone on this thread tried SLB. Wanted to know what is the yield like for lending out shares. I know it differs for each security, so an approx. will also help.
I’m curious if anyone is using SLB to short and use shorts to go long. With say 5L of balance, can’t one short with 4L and use that cash to buy longs? Would love to hear their views.
I’ve been tracking the SLB market for the past few weeks as I came to know about this opportunity to get a great yield on your long term portfolio bets.
However, I’ve observed that there is almost zero awareness/interest/liquidity in this product. There is zilch interest in fundamentally strong businesses like Asian Paints, HDFC Bank, Nestle, Titan, etc. - either because there is already an F&O market to play them or it doesn’t make sense to go short on these businesses. And if in case there are any bids for such companies - the yields are like 0-2% per annum.
Most of the decent bids are for weak damaged corporates such as Vodafone Idea, Punjab National Bank, Zee which may not be possible to short due to lack of presence in the F&O market.
So overall, I realized that this SLB segment is not worth following unless there is a market crash such as March 2020 where even good businesses might have got some crazy yield bids, but then in those times you may not want to lend out your securities due to various fears or panic all around.
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Thank you! very nicely explained.
I had almost the same premonitions about SLB. My guess is cause the process is offline and SLB is usually used by institutions there isn’t much liquidity and demand for this segment.
Maybe someday when this process moves online, there will be better liquidity and higher yields.
But Idea, PNB and Zeel ARE in F&O. The problem is that the government doesn’t want us to short, that’s why the only scrips that are in SLB are those who have presence in F&O.
Besides why does a scrip needs to be in F&O for it to be a good short candidate. Any and all scrips which you think should go down are short candidates.
A video which explains the SLB mechanism in greater detail:
