When the price is right

摘要

There is an old adage among securities lending players that if you hold a stock it is "general collateral" but if you are desperately seeking to borrow a stock, it becomes a "special". Like over-the-counter deals, securities lending grew out of a demand for stocks for shorting the market and started with bi-lateral agreements between custodial banks holding shares on behalf of large funds and prime brokers working on behalf of hedge funds. While this is still very much the case, lenders need to know that they are getting the best revenue for the loan of their stocks and borrowers need to ensure they are not paying over the odds.