Lending securities(redirected from Lending Security)
Securities borrowed from a broker's inventory, from another customer's margin account, or from another broker, when a customer is required to deliver on a short sale.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
In short selling, the act or practice of placing one's own securities into the trust of another person or institution with the expectation that identical securities will be returned within a certain number of days (often three). The practice of lending securities is crucial to the borrower's hedging of risk: if the borrower were unable to obtain such a security, he/she would be unable to make a profit on a decline in the security's value. Securities are often lent by a broker and placed in a margin account. See also: Hedge fund.
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