- The feature is becoming more popular in the UK
- The risks are contained but so are the rewards
Share trading platforms Freetrade and Robinhood have introduced a new feature that enables investors to earn extra income by lending their shares to short sellers.
Share lending is not offered by mainstream platforms such as Hargreaves Lansdown or AJ Bell, but Trading 212 does do it. Shares are borrowed for various purposes, short selling being a key one. Stock lending is not available in individual savings accounts (Isas) due to HMRC rules, so it’s typically only for shares held in general investment accounts. Freetrade also offers it in self-invested personal pensions (Sipps).