"Stock Yield Enhancement Program" of Interactive Brokers

Investing / Brokers
104

I don’t want to continue this argument, maybe you are right.

You can actually see how many of your shares are segregated and how many are borrowed. It is hidden pretty carefully, and you have to do some tricks to access this information.

You have to run a standard activity report, not a customized template, for a specific date, but not too early. Something like after the beginning of the next trading day in US.

Then you get a section in the report called “Collateral for Customer Borrowing”. It has columns:

  • “Securities Segregated”: number and value of shares in your name, that are separated from IB’s assets. These shares are not supposed to be used by IB.

  • “Securities Not Segregated”: the opposite of the previous one. You are still, well, a beneficial owner, but IB is using them somehow.

  • Securities Not Segregated: Third Party “Right to Use”: securities lent out without your explicit consent and with no lending revenue shared.

  • Securities Not Segregated: Subject to Stock Yield Enhancement Program.

If you have a debt (negative cash positions), some stocks are taken by IB as a collateral (Securities Not Segregated) and they can be lent out no matter your settings and with no interest payments for you (Securities Not Segregated: Third Party “Right to Use”).

However, securities that you bought are not segregated until the trade is settled (2 days 1 day now) and can be also lent out without your permission.

So, IF you have bought shares around an ex date AND IB have lent them out before the trade had been settled AND these shares distributed something while being lent out, THEN you you get PIL instead of “true” dividend. In this case, I guess it doesn’t matter if you have a cash or margin account.

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