[gerdemb]

Interactive Brokers has a stock lending program and shares half the profits with their customers who opt-in. They are transparent about how it works. (Basically they deposit cash collateral to your account to cover the stocks they’ve lent out).

https://ibkr.info/article/1839

I think many other brokers do basically same, but aren’t transparent and don’t share the profits.

[peterkouvaris]

Seconding IBKR. I've always viewed them as the most ethical broker and also the one with the highest skill ceiling. They do not sell order flow, they offer programs like the above so you can earn interest when they loan your shares out to other individuals or institutions, and let you get very granular about things like your exchange routing.

[seaman1921]

You should watch their CEO Thomas Peterffy's interview during the gamestop situation - he basically said "shorting is illegal" and a lot of other such nonsense .. completely lost respect for IB after that, even though I still maintain an account.

https://streamable.com/ycdec9

[nayuki]

Give this woman an award: 03:00 "But, but, can I, if I, Thomas, if I can break in - and we should point out that Interactive Brokers is a sponsor of Bloomberg Radio and Bloomberg TV. So it's not the case that traders were doing anything wrong or illegal. It's just a case of logistically, there were going to be problems, right, in terms of clearinghouses. So that's more an operational problem versus a market problem or traders doing something wrong, correct?"

And Thomas responds: "No, no, no, not correct. So, so short squeezes are illegal. ..."

[throw0101a]

That's some inside baseball observation by her. See NSCC Procedure XV, on (virtual) page 294/385:

> Each Member of the Corporation, except as otherwise provided in this Procedure, is required to contribute to the Clearing Fund maintained by the Corporation an amount calculated by the Corporation equal to:

* https://www.dtcc.com/~/media/Files/Downloads/legal/rules/nsc...

[karl11]

Naked shorting is illegal

[fuzzfactor]

>Ask HN: Can I trust brokers with my stocks?

I'm not so sure I would be able to trust most of them with my laundry as much as the average dry cleaning professional.

Which one would be most likely to be wearing your best suit more often than you do while it is not in your possession?

>Naked shorting is illegal

Probably less obvious when wearing someone elses' outfit instead of nothing at all.

[Temporarily21]

Where do you put your money?

[fuzzfactor]

Best place I've found is into a company where I own the majority of shares.

[mortehu]

That's a long video. Can you link directly to the nonsensical statement you're referring to?

[nayuki]

Thomas says a lot of nonsensical things during those 4 minutes. He keeps on continually referring to the trading prices of GameStop, basically belittling the market price of $100~200 and continually insisting that it is a company worth a lot less (somewhere below $50, I forget). Even though he runs a brokerage firm, his personal opinion is very non-neutral and he wants to dictate a market direction.

[delvinj]

He says "so short squeezes are illegal" at about 3:30

[throwitawayfam]

Agree. If the OP's concern is the Gamestop fiasco, then IB is just as bad as Robinhood.

[lostmsu]

AFAIK, IB restricted only option trading, while RH also restricted buying actual stock.

[throwitawayfam]

My mistake, you're absolutely correct.

[seaman1921]

correction - i meant he said "short squeezing is illegal" which is why they stopped the trade. For those asking for timestamp, he says that around 3:30

[ex3ndr]

CEO of IBKR openly admitted that they halted GME trading "because stock was too expensive" and will open it again once "it would cost 17$". And laughs in between.

In what world this is "ethical"?

[rtlfe]

How is it not ethical? They're stopping people from losing money buying something that is overpriced.

[capableweb]

Isn't the whole purpose of a free market with stock trading that people make those decisions themselves? I've certainly made bad trades in the past, but no one stopped me. Shouldn't I have been stopped as well then?

And if everyone is protected from losing money, we should just disable buying stocks at all for everyone, because you can always lose money.

[sideshowb]

But causing people to lose money who already bought it and couldn't sell, presumably

[mortehu]

They don't sell 100% of their order flow, but their firm 606 disclosure says they send significant amounts to Citadel and Virtu.

[jdreaver]

I wonder if that is just limited to IBKR Lite, their commission free platform https://www.interactivebrokers.com/en/index.php?f=45196

[austhrow743]

Even if they don't receive payment for it, one would certainly hope they're sending their orders to wholesalers and not an exchange. They'd be screwing their customers otherwise.

[mortehu]

There's no point in hoping, because the 606 forms on their website clearly say they send lots of orders to exchanges too.

[tony0x02]

During one of the interviews, I think he says that payment for order from is like 1-2% of their revenue.

[IgorPartola]

What kind of interest does that pay? It seems like a good way to use shares on which you are going long and plan to hold for a while.

[humanlion87]

It depends on the stock and the current demand for that stock. If you had GME shared during the recent frenzy, you could have earned a lot in interest. But, say you have Google, you won't earn much since there is a lot of shares and lot of people willing to lend.

[IgorPartola]

Do you have a sense of at least order of magnitude for the interest rates? Like, is this a "up to 0.25% annually" situation or is it something more substantial?