lending at a premium(redirected from Lends at a Premium)
Lending at a premium
Lending at a Premium
A loan of a security between two brokers where the lending broker charges a fee to the other. Lending at a premium occurs to cover the cost of the short sale of the security by a client. It is not common to lend at a premium (most brokers lend securities to each other for free as a courtesy); it primarily occurs for illiquid securities.
lending at a premium
The imposition of an extra fee when securities are lent by one broker to another to cover a customer's short sale. Although lending at a premium is fairly unusual, it may occur when a particular security is difficult to borrow.