Best ETFs for shorting: IB Stock yield enhancement

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sean.mcgrath
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Best ETFs for shorting: IB Stock yield enhancement

Post by sean.mcgrath »

Hi all,

A question on how to optimize my portfolio for IB's stock lending program.

I swallowed my doubts and enrolled in the IBKR "stock yield enhancement program" in December. Basically, they lend out your stocks to shorts and split the interest income with you.

It is interesting to see which of my ETFs are lent out, and at what yield. E.g., IXUS (total non-US) was lent out at 0.12% interest, of which I received half. FNDF (Large cap, fundamental international) was lent at 5.89%!

Obviously supply and demand is at work, and IXUS is a much larger fund. However, there are lots of similar funds, and it raises the question: is there (for example) a particular large cap, fundamental international fund which is sort of the "go-to" fund if you would like this kind of a short? Alternatively, do shorters scan the top ten funds in a class, and just go for whatever's available?

I really don't care whether my ETF is from iShares, Vanguard or Schwab as long as they are functionally equivalent. Does anyone know how one would find out which funds are the standards used for shorts?

cheers,
Sean
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whodidntante
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by whodidntante »

I believe IB has a page where you can check the borrow rates.
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sean.mcgrath
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by sean.mcgrath »

whodidntante wrote: Mon Jan 13, 2020 12:37 pm I believe IB has a page where you can check the borrow rates.

Thanks, I'll have a look -- although the rates vary daily. Will see whether it gives a hint as to which are most popular.
YRT70
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by YRT70 »

sean.mcgrath wrote: Mon Jan 13, 2020 1:15 pm
whodidntante wrote: Mon Jan 13, 2020 12:37 pm I believe IB has a page where you can check the borrow rates.

Thanks, I'll have a look -- although the rates vary daily. Will see whether it gives a hint as to which are most popular.
Did you happen to find this out?

From what I recall my VXUS and DLS get lend out quite often.
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by Impatience »

I strongly doubt the effort involved in optimizing for this will be worth the reward - but, I could be wrong! Especially if you have a big account.

Anyway you should check out iborrowdesk.com. They scrape and publish the borrowing costs for every ticker on IB and even show the history of the fees going way back so you can see how they’ve fluctuated.
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by whodidntante »

Sorry, I didn't know you guys were still looking for this.

Here's a list of all shortable US stocks at IB, along with the current fee rate.
ftp://shortstock@ftp3.interactivebrokers.com/usa.txt
YRT70
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by YRT70 »

whodidntante wrote: Mon Aug 24, 2020 1:33 pm Sorry, I didn't know you guys were still looking for this.

Here's a list of all shortable US stocks at IB, along with the current fee rate.
ftp://shortstock@ftp3.interactivebrokers.com/usa.txt
Interesting. Is there a different list for IB UK? (I'm with IB UK)

#SYM|CUR|NAME|CON|ISIN|REBATERATE|FEERATE|AVAILABLE|
VXUS|USD|VANGUARD TOTAL INTL STOCK|83512168|XXXXXXX97683|-1.1872|1.2672|1100000|
DLS|USD|WISDOMTREE INTL S-C DVD FUND|39832868|XXXXXXXW7609|-2.0441|2.1241|200000|

So this would mean DLS gets the higher fee, 2.1 vs. 1.3?

But then VXUS might still be more popular, causing it to be lend out more often?
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by 123 »

Impatience wrote: Mon Aug 24, 2020 1:28 pm I strongly doubt the effort involved in optimizing for this will be worth the reward - but, I could be wrong! Especially if you have a big account...
+1 A VERY big account.
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by whodidntante »

YRT70 wrote: Mon Aug 24, 2020 1:38 pm
whodidntante wrote: Mon Aug 24, 2020 1:33 pm Sorry, I didn't know you guys were still looking for this.

Here's a list of all shortable US stocks at IB, along with the current fee rate.
ftp://shortstock@ftp3.interactivebrokers.com/usa.txt
Interesting. Is there a different list for IB UK? (I'm with IB UK)

#SYM|CUR|NAME|CON|ISIN|REBATERATE|FEERATE|AVAILABLE|
VXUS|USD|VANGUARD TOTAL INTL STOCK|83512168|XXXXXXX97683|-1.1872|1.2672|1100000|
DLS|USD|WISDOMTREE INTL S-C DVD FUND|39832868|XXXXXXXW7609|-2.0441|2.1241|200000|

So this would mean DLS gets the higher fee, 2.1 vs. 1.3?
Use the "SLB (Stock Loan Borrow) Rates" tool in TWS. I obviously can't link to that. But it should show the rates that would apply for you.

Here is a list of shortable UK stocks. If you're holding US domiciled funds, I believe the US rate would apply. Not sure how they handle currency.
ftp://shortstock@ftp3.interactivebroker ... ritish.txt

For the second question, yes, or at least I think so.
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by sean.mcgrath »

whodidntante wrote: Mon Aug 24, 2020 1:57 pm Here is a list of shortable UK stocks. If you're holding US domiciled funds, I believe the US rate would apply. Not sure how they handle currency.
ftp://shortstock@ftp3.interactivebroker ... ritish.txt
Yes, as far as I can tell, in the NL they give me the US rates. It is still virtually no money, Ante, but amazing how much people like it. :happy
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by YRT70 »

whodidntante wrote: Mon Aug 24, 2020 1:57 pm
YRT70 wrote: Mon Aug 24, 2020 1:38 pm
whodidntante wrote: Mon Aug 24, 2020 1:33 pm Sorry, I didn't know you guys were still looking for this.

Here's a list of all shortable US stocks at IB, along with the current fee rate.
ftp://shortstock@ftp3.interactivebrokers.com/usa.txt
Interesting. Is there a different list for IB UK? (I'm with IB UK)

#SYM|CUR|NAME|CON|ISIN|REBATERATE|FEERATE|AVAILABLE|
VXUS|USD|VANGUARD TOTAL INTL STOCK|83512168|XXXXXXX97683|-1.1872|1.2672|1100000|
DLS|USD|WISDOMTREE INTL S-C DVD FUND|39832868|XXXXXXXW7609|-2.0441|2.1241|200000|

So this would mean DLS gets the higher fee, 2.1 vs. 1.3?
Use the "SLB (Stock Loan Borrow) Rates" tool in TWS. I obviously can't link to that. But it should show the rates that would apply for you.

Here is a list of shortable UK stocks. If you're holding US domiciled funds, I believe the US rate would apply. Not sure how they handle currency.
ftp://shortstock@ftp3.interactivebroker ... ritish.txt

For the second question, yes, or at least I think so.
Thanks. So the reason I'm interested in this is that I have good portion of DLS and am considering switching to AVDV. DLS has a 0.58 TER, AVDV has 0.38. But DLS is quite popular with lending out. It could well compensate for the TER.

AVDV is quite new, which leads me to think it may not be so popular. On the plus side: AVDV seems to deliver a very high fee.

#SYM|CUR|NAME|CON|ISIN|REBATERATE|FEERATE|AVAILABLE|
AVDV|USD|AVANTIS INTL S-C VALUE ETF|385087093|XXXXXXX28021|-18.0058|18.0858|75000|

I know there are many more factors to consider (factor loading, dividends etc) but I'd like to estimate if AVDV will perform similar in the SYEP. Any thoughts?

PS. I haven't installed TWS currently, I'm using the web interface of an IB reseller.
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by occambogle »

AVDV was getting me about 15-18% lend rate these last few months, or rather 7-8% to the client. By far the highest rate of any of my ETFs. That said it's not like it has performed well these last months. But in any case the amounts paid by SYEP, while welcome, seem so low that I certainly wouldn't choose my ETF based on its SYEP potential.
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by corp_sharecropper »

Related to this, and the reason I'm resurrecting this topic... Is there some sort of indication that shows when your shares are lent out? Like when you're just looking at your portfolio positions in the mobile app, web, or TWS? Without reading into it I was initially hesitant to activate stock yield enhancement but after reading the legalese I feel much better and activated it last week, just not sure if anything I own has been borrowed yet b/c I don't know what or where to look. Is it only visible on a month end statement?

I have no illusions that I will become rich thanks to this but any yield counts (you'd think bogleheads, ya know the folks who chase a few bips of savings yield and will switch funds for a single digit bip ER benefits, would be more receptive to this but I think IB just has too much association/smell of margin & "trading" to overcome for some). If anything I'll be thrilled if this partially offsets my low market data subscription costs. I understand IB isn't for everyone, certainly not for most bogleheads, but I love it for their second to none (by miles) margin rates, breadth of products (equities, bonds, options, futures, FOPs, forex, warrants, etc), and features/services like API access, this stock yield enhancement program, account partitions, portfolio rebalancer, interest on cash, low commissions on transactions that don't go to dark pools or PFOF HFT shops (also sharing of exchange rebates for orders that add liquidity), etc... Again, it's obvious and understandable why this wouldn't matter to most bogleheads but all these features under one roof is big to me (and at least a few other bogleheads). I do have a small wishlist for the powers that be at IB but that'll be for another day/thread.
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by occambogle »

corp_sharecropper wrote: Sun Sep 06, 2020 4:28 pm Is there some sort of indication that shows when your shares are lent out? Like when you're just looking at your portfolio positions in the mobile app, web, or TWS?
No, there's not. But... you can create a custom report and then run it over a time period, say "Month to date", that will show all stocks lent, the interest rate received, and how much was paid for every day stocks were lent.
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by shess »

123 wrote: Mon Aug 24, 2020 1:54 pm
Impatience wrote: Mon Aug 24, 2020 1:28 pm I strongly doubt the effort involved in optimizing for this will be worth the reward - but, I could be wrong! Especially if you have a big account...
+1 A VERY big account.
I see what you mean, but ... humor me, pretend I have a good-sized lot of non-dividend-paying stock which I have zero interest in selling. This _appears_ to be a free lunch, right? But, while the ftp file listed in this thread shows a FEERATE, I think that is the cost to borrow shares. In the IB explainer video, they mention that if the number of shares lent is less than the number of shares available, the income is pro-rata across the available shares. So if 50% of the available shares are lent, you receive 50% of the FEERATE, I think for the days lent.

Is there any way to zero in on the net for that, what the actual results are on a day-to-day basis? If you were to get the FEERATE for the entire year on a position, it could be comparable in magnitude to a good transfer bonus (to my mind a good transfer bonus is $1M getting $2500, whereas $1M at 0.3%/2 gets you $1500). Obviously, the $2500 is prefered, but it takes a bit of work and that level of bonus is getting scarce, while the $1500 number is very little work. But if you're only able to lend out half your shares half the time, then it's more like $400/year, which is much less attractive, and if it's a quarter of your shares 5 days a month, it's $60 or so per year.

I realize that there are no guarantees on this, but right now AFAICT the only way I can find out is to enable this on my account, and then watch what happens. Nice would be to just see what the per-share income the brokerage paid yesterday for that stock was, or even the amount paid out last week, something like that. Then if it's just $0, I can move on immediately.
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by AlohaJoe »

occambogle wrote: Mon Sep 07, 2020 12:13 am
corp_sharecropper wrote: Sun Sep 06, 2020 4:28 pm Is there some sort of indication that shows when your shares are lent out? Like when you're just looking at your portfolio positions in the mobile app, web, or TWS?
No, there's not. But... you can create a custom report and then run it over a time period, say "Month to date", that will show all stocks lent, the interest rate received, and how much was paid for every day stocks were lent.
FWIW, it shows up in the standard activity report, so you don't even need to create a custom report. I'm not sure why you'd want an indication of your shares being lent out in the app or TWS, though?
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by AlohaJoe »

shess wrote: Mon Sep 07, 2020 1:27 am Is there any way to zero in on the net for that, what the actual results are on a day-to-day basis? If you were to get the FEERATE for the entire year on a position, it could be comparable in magnitude to a good transfer bonus (to my mind a good transfer bonus is $1M getting $2500, whereas $1M at 0.3%/2 gets you $1500).
I'm currently making around $4,200/year/$1M from IBKR securities lending, which is quite a bit above the $2,500/year/$1M your benchmark.

edit to add: also transfer bonuses are capped (I think). If you transfer $5M you get the same bonus as for transferring $1M, whereas securities lending scales to your actual portfolio.
Last edited by AlohaJoe on Mon Sep 07, 2020 6:31 am, edited 1 time in total.
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by whodidntante »

corp_sharecropper wrote: Sun Sep 06, 2020 4:28 pm Is there some sort of indication that shows when your shares are lent out? Like when you're just looking at your portfolio positions in the mobile app, web, or TWS? Without reading into it I was initially hesitant to activate stock yield enhancement but after reading the legalese I feel much better and activated it last week, just not sure if anything I own has been borrowed yet b/c I don't know what or where to look. Is it only visible on a month end statement?
Login to the web site. Go to Reports->Activity->IBKR Managed Securities Lent (Stock Yield Enhancement Program).
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by YRT70 »

AlohaJoe wrote: Mon Sep 07, 2020 2:09 am
shess wrote: Mon Sep 07, 2020 1:27 am Is there any way to zero in on the net for that, what the actual results are on a day-to-day basis? If you were to get the FEERATE for the entire year on a position, it could be comparable in magnitude to a good transfer bonus (to my mind a good transfer bonus is $1M getting $2500, whereas $1M at 0.3%/2 gets you $1500).
I'm currently making around $4,200/year/$1M from IBKR securities lending, which is quite a bit above the $2,500/year/$1M your benchmark.
Wow, that's a lot more than I'm making. What funds/shares are making most of your income?
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by AlohaJoe »

YRT70 wrote: Mon Sep 07, 2020 6:24 am
AlohaJoe wrote: Mon Sep 07, 2020 2:09 am
shess wrote: Mon Sep 07, 2020 1:27 am Is there any way to zero in on the net for that, what the actual results are on a day-to-day basis? If you were to get the FEERATE for the entire year on a position, it could be comparable in magnitude to a good transfer bonus (to my mind a good transfer bonus is $1M getting $2500, whereas $1M at 0.3%/2 gets you $1500).
I'm currently making around $4,200/year/$1M from IBKR securities lending, which is quite a bit above the $2,500/year/$1M your benchmark.
Wow, that's a lot more than I'm making. What funds/shares are making most of your income?
Hard to say for sure, since my portfolio at IBKR hasn't been constant over this year -- maybe some things have earned more money simply because I have a larger position in them? I could probably calculate it precisely by I'm not going to bother :D . But at a guess EMGF, REET, and SMLF.
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by YRT70 »

AlohaJoe wrote: Mon Sep 07, 2020 6:58 am
YRT70 wrote: Mon Sep 07, 2020 6:24 am
AlohaJoe wrote: Mon Sep 07, 2020 2:09 am
shess wrote: Mon Sep 07, 2020 1:27 am Is there any way to zero in on the net for that, what the actual results are on a day-to-day basis? If you were to get the FEERATE for the entire year on a position, it could be comparable in magnitude to a good transfer bonus (to my mind a good transfer bonus is $1M getting $2500, whereas $1M at 0.3%/2 gets you $1500).
I'm currently making around $4,200/year/$1M from IBKR securities lending, which is quite a bit above the $2,500/year/$1M your benchmark.
Wow, that's a lot more than I'm making. What funds/shares are making most of your income?
Hard to say for sure, since my portfolio at IBKR hasn't been constant over this year -- maybe some things have earned more money simply because I have a larger position in them? I could probably calculate it precisely by I'm not going to bother :D . But at a guess EMGF, REET, and SMLF.
Thanks. I'm not totally sure but I think I'm making like 0.1-0.2% while you're making 0.42%. My total portfolio size is on average 500k USD.

I'm with IB UK, maybe that's also different, I don't know.
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by shess »

YRT70 wrote: Mon Sep 07, 2020 7:06 am
AlohaJoe wrote: Mon Sep 07, 2020 6:58 am
YRT70 wrote: Mon Sep 07, 2020 6:24 am
AlohaJoe wrote: Mon Sep 07, 2020 2:09 am
shess wrote: Mon Sep 07, 2020 1:27 am Is there any way to zero in on the net for that, what the actual results are on a day-to-day basis? If you were to get the FEERATE for the entire year on a position, it could be comparable in magnitude to a good transfer bonus (to my mind a good transfer bonus is $1M getting $2500, whereas $1M at 0.3%/2 gets you $1500).
I'm currently making around $4,200/year/$1M from IBKR securities lending, which is quite a bit above the $2,500/year/$1M your benchmark.
Wow, that's a lot more than I'm making. What funds/shares are making most of your income?
Hard to say for sure, since my portfolio at IBKR hasn't been constant over this year -- maybe some things have earned more money simply because I have a larger position in them? I could probably calculate it precisely by I'm not going to bother :D . But at a guess EMGF, REET, and SMLF.
Thanks. I'm not totally sure but I think I'm making like 0.1-0.2% while you're making 0.42%. My total portfolio size is on average 500k USD.

I'm with IB UK, maybe that's also different, I don't know.
OK, this is interesting! Even .1% would be great by me. I moved a chunk of very-long-term stock to E-trade to snag a transfer bonus, with the intention of moving it away after the year (I do NOT care to have a long-term relationship with MSSB), and they have a similar program, maybe I'll just turn it on and see what happens.
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by YRT70 »

This might be an interesting website with more info: https://www.etfchannel.com/etfs/?symbol=VXUS

VXUS — SHORT INTEREST
Shares Short 3,600,000
Chg. from Last Month +2,060,000
Shares Outstanding 442,524,573
% of Shares Short 0.81%
Days to Cover 1.4

Can anyone remember the other website that displayed rates for ETFs?

Edit: found it https://iborrowdesk.com/
shess wrote: Mon Sep 07, 2020 12:18 pm OK, this is interesting! Even .1% would be great by me.
Yeah that's what I thought too. Other brokers here are making me pay. IB is paying me.
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by caklim00 »

shess wrote: Mon Sep 07, 2020 12:18 pm
YRT70 wrote: Mon Sep 07, 2020 7:06 am
AlohaJoe wrote: Mon Sep 07, 2020 6:58 am
YRT70 wrote: Mon Sep 07, 2020 6:24 am
AlohaJoe wrote: Mon Sep 07, 2020 2:09 am

I'm currently making around $4,200/year/$1M from IBKR securities lending, which is quite a bit above the $2,500/year/$1M your benchmark.
Wow, that's a lot more than I'm making. What funds/shares are making most of your income?
Hard to say for sure, since my portfolio at IBKR hasn't been constant over this year -- maybe some things have earned more money simply because I have a larger position in them? I could probably calculate it precisely by I'm not going to bother :D . But at a guess EMGF, REET, and SMLF.
Thanks. I'm not totally sure but I think I'm making like 0.1-0.2% while you're making 0.42%. My total portfolio size is on average 500k USD.

I'm with IB UK, maybe that's also different, I don't know.
OK, this is interesting! Even .1% would be great by me. I moved a chunk of very-long-term stock to E-trade to snag a transfer bonus, with the intention of moving it away after the year (I do NOT care to have a long-term relationship with MSSB), and they have a similar program, maybe I'll just turn it on and see what happens.
good luck. Have a ton of AVDV and etrade says I'm not eligbile.

I also do the same thing chasing bonuses, but now I'm beginning to wonder if its better to chase lending instead. Schwab and etrade didn't give me anything. Ally is the one place where I received revenue. At first it was ridiculously small, but I recall at the end of my time there it went up significantly. I couldn't find anything on Vanguard so assuming they don't offer any lending.
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by YRT70 »

Vanguard VIOV en SPDR SLYV both track S&P 600 small cap value and both have an expense ratio of 0.15%.

Image
(source: ETFchannel.com)

According to this site SLYV lends at about 3.6-3.7%
https://iborrowdesk.com/report/SLYV

VIOV about 6%
https://iborrowdesk.com/report/VIOV

This is from the IBKR file
#SYM|CUR|NAME|CON|ISIN|REBATERATE|FEERATE|AVAILABLE|
SLYV|USD|SPDR S&P 600 SMALL CAP VALUE|45540634|XXXXXXXA3005|-4.0673|4.1473|150000|
VIOV|USD|VANGUARD S&P SMALL-CAP 600 V|78645845|XXXXXXX27783|-5.5567|5.6367|55000|

Going by these numbers it looks like VIOV would deliver more income through lending, correct?

It is plausible to assume that this will hold true in the future or is this something that could change every month?
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by whodidntante »

AlohaJoe wrote: Mon Sep 07, 2020 6:58 am
YRT70 wrote: Mon Sep 07, 2020 6:24 am
AlohaJoe wrote: Mon Sep 07, 2020 2:09 am
shess wrote: Mon Sep 07, 2020 1:27 am Is there any way to zero in on the net for that, what the actual results are on a day-to-day basis? If you were to get the FEERATE for the entire year on a position, it could be comparable in magnitude to a good transfer bonus (to my mind a good transfer bonus is $1M getting $2500, whereas $1M at 0.3%/2 gets you $1500).
I'm currently making around $4,200/year/$1M from IBKR securities lending, which is quite a bit above the $2,500/year/$1M your benchmark.
Wow, that's a lot more than I'm making. What funds/shares are making most of your income?
Hard to say for sure, since my portfolio at IBKR hasn't been constant over this year -- maybe some things have earned more money simply because I have a larger position in them? I could probably calculate it precisely by I'm not going to bother :D . But at a guess EMGF, REET, and SMLF.
It's easy to find out.

Run the activity report, but instead of daily, select year to date. Then look at the "IBKR Managed Securities Lent Interest Details (Stock Yield Enhancement Program)" section of the report. It's all there.
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by whodidntante »

YRT70 wrote: Thu Sep 17, 2020 6:02 am Vanguard VIOV en SPDR SLYV both track S&P 600 small cap value and both have an expense ratio of 0.15%.

Image
(source: ETFchannel.com)

According to this site SLYV lends at about 3.6-3.7%
https://iborrowdesk.com/report/SLYV

VIOV about 6%
https://iborrowdesk.com/report/VIOV

This is from the IBKR file
#SYM|CUR|NAME|CON|ISIN|REBATERATE|FEERATE|AVAILABLE|
SLYV|USD|SPDR S&P 600 SMALL CAP VALUE|45540634|XXXXXXXA3005|-4.0673|4.1473|150000|
VIOV|USD|VANGUARD S&P SMALL-CAP 600 V|78645845|XXXXXXX27783|-5.5567|5.6367|55000|

Going by these numbers it looks like VIOV would deliver more income through lending, correct?

It is plausible to assume that this will hold true in the future or is this something that could change every month?
Yes, VIOV would have delivered more income IF the shares were lent (no guarantees there). The rates can change daily.

I looked back on my actual results, and it seems IB is keeping half of the fee rate and passing half through, which is what they say they do.
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by occambogle »

YRT70 wrote: Thu Sep 17, 2020 6:02 am Going by these numbers it looks like VIOV would deliver more income through lending, correct?
I don't know the answer to that but I can say this... I wouldn't let SYEP amounts in any way determine which ETFs I invest in, because the differences between the ETFs themselves are likely to have way higher effect than any SYEP returns would. SYEP returns are just too small generally. I recently switched from AVDV to IMTM for a portion of my international so lost out on the "nice" SYEP yield that AVDV was giving me, but it's minuscule compared to even the daily P&L of almost any ETF so I don't let it affect those kind of decisions. [Side note: Not sure if it was a good decision to switch between those two, but that's an entirely different question...]
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by YRT70 »

occambogle wrote: Thu Sep 17, 2020 6:25 am
YRT70 wrote: Thu Sep 17, 2020 6:02 am Going by these numbers it looks like VIOV would deliver more income through lending, correct?
I don't know the answer to that but I can say this... I wouldn't let SYEP amounts in any way determine which ETFs I invest in, because the differences between the ETFs themselves are likely to have way higher effect than any SYEP returns would. SYEP returns are just too small generally. I recently switched from AVDV to IMTM for a portion of my international so lost out on the "nice" SYEP yield that AVDV was giving me, but it's minuscule compared to even the daily P&L of almost any ETF so I don't let it affect those kind of decisions. [Side note: Not sure if it was a good decision to switch between those two, but that's an entirely different question...]
But VIOV and SLYV track exactly the same index, they have the same TER and they perform the same.

In my experience income through lending can easily make a significant difference.
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by occambogle »

YRT70 wrote: Thu Sep 17, 2020 6:39 am But VIOV and SLYV track exactly the same index, they have the same TER and they perform the same.
Sorry I wasn't aware of that.... in that case I guess it could make a very small difference.
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by YRT70 »

occambogle wrote: Thu Sep 17, 2020 6:42 am
YRT70 wrote: Thu Sep 17, 2020 6:39 am But VIOV and SLYV track exactly the same index, they have the same TER and they perform the same.
Sorry I wasn't aware of that.... in that case I guess it could make a very small difference.
No problem. Well if your holding is big enough I'd estimate it could amount to a few hundred dollars a year. If you'd reinvest that every year and let it compound, I think it could be an interesting difference.
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by whodidntante »

I like that the ETF makes money from securities lending which is shared with the investor, and then the broker makes money from securities lending that is shared with the investor. It's not that difficult to net a negative ER these days.
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by YRT70 »

whodidntante wrote: Thu Sep 17, 2020 7:26 am I like that the ETF makes money from securities lending which is shared with the investor, and then the broker makes money from securities lending that is shared with the investor. It's not that difficult to net a negative ER these days.
Yep same here. What do you think of the lending data on VIOV vs. SLYV I posted? Slight benefit for VIOV?
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by corp_sharecropper »

After finding the report, I made $1.75 in the first 13 days of September. Seems I have multiple holdings lent out everyday. Account size at IB is only $13K, and obviously only a portion is lent. I haven't annualized what that $1.75 is but I guess it's actually pretty decent in the current environment, especially because 25% of the account was still in the ACAT process transferring in for the first few days of the month.
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by whodidntante »

corp_sharecropper wrote: Thu Sep 17, 2020 8:37 am After finding the report, I made $1.75 in the first 13 days of September. Seems I have multiple holdings lent out everyday. Account size at IB is only $13K, and obviously only a portion is lent. I haven't annualized what that $1.75 is but I guess it's actually pretty decent in the current environment, especially because 25% of the account was still in the ACAT process transferring in for the first few days of the month.
This thread is starting to rust a little but I've been paying closer attention lately and I am satisfied with the program. Occasionally, they'll loan a big position out at a high borrow rate over the weekend. It's like finding money on the ground. I'm also fascinated at how often a large portion of my VXUS gets loaned out, although the rate on that one tends to be less than 0.5%.
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by rchmx1 »

I've also been pleasantly surprised by the program. I've been at IBKR for not quite a month, and only transferred a bit over $10k of NTSX. Out of 18 trading days, a portion of my shares have been leant 9 times, and I've netted an average of a bit over 2% for each transaction. Obviously, very small in dollar terms, I've made a total of $4.33 since shares were available to be lent on 9/10, but I wasn't expecting to receive much action at all on an illiquid fund like NTSX.
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by tj »

Doesn't IBKR charge monthly fees, too?
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by whodidntante »

tj wrote: Fri Oct 09, 2020 10:27 pm Doesn't IBKR charge monthly fees, too?
There are easy ways to avoid a monthly fee. Use IBKR Lite or use Pro with 100k in assets and don't subscribe to any data feeds that are not free.
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by tj »

whodidntante wrote: Fri Oct 09, 2020 10:37 pm
tj wrote: Fri Oct 09, 2020 10:27 pm Doesn't IBKR charge monthly fees, too?
There are easy ways to avoid a monthly fee. Use IBKR Lite or use Pro with 100k in assets and don't subscribe to any data feeds that are not free.
That's good to know. I didn't realize $100k waived the fees. Are there not trading fees that are not waive-able? For some reason I thought they had more fees than the usual suspects.
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by Uncorrelated »

My portfolio contains (mostly) VTI and VXUS and has SYEP enabled since last year. This seems to net around 0.1% annually.

It's nice to have but I doubt it's worth optimizing for.
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by occambogle »

tj wrote: Fri Oct 09, 2020 11:51 pm That's good to know. I didn't realize $100k waived the fees. Are there not trading fees that are not waive-able? For some reason I thought they had more fees than the usual suspects.
If you don't have the $100k waived fees and are paying $10/monthly inactivity fees, then your trading costs (i.e. transaction fees for shares bought or sold) come out of that $10.... if I remember correctly.
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Re: Best ETFs for shorting: IB Stock yield enhancement

Post by whodidntante »

tj wrote: Fri Oct 09, 2020 11:51 pm
whodidntante wrote: Fri Oct 09, 2020 10:37 pm
tj wrote: Fri Oct 09, 2020 10:27 pm Doesn't IBKR charge monthly fees, too?
There are easy ways to avoid a monthly fee. Use IBKR Lite or use Pro with 100k in assets and don't subscribe to any data feeds that are not free.
That's good to know. I didn't realize $100k waived the fees. Are there not trading fees that are not waive-able? For some reason I thought they had more fees than the usual suspects.
If you're mostly a buy and hold and die investor, IBKR Lite is likely the better option since there are no commissions. If you have an average margin debt of 12k or more then Pro makes sense. You can easily switch between Lite and Pro if your situation changes.

I'm surprised at how much talk there is about IB on this site lately. I wonder if the IBKR Lite offering hooked some Bogleheads.
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