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Lending at a rate
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
Lending at a Rate
The interest a brokerage pays to a client whose funds it is holding in escrow. When a client borrows securities from a brokerage and sells them, the brokerage usually collects the sale price and holds it until the client repays the borrowed securities. If the brokerage lends at a rate, it pays the client interest for holding securities.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
lending at a rate
The payment of interest by a broker-dealer on a customer's credit balance from a short sale. When the investor sells short, the broker holds the proceeds from the sale in escrow to secure the securities borrowed for the short sale. In certain instances the broker may pay the customer interest on this balance.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.