Like Tree1Likes
  • 1 Post By traineeinvestor

IBKR (HK) Stock Yield Enhancement Program - pros/ cons?

Closed Thread
  1. #1

    Join Date
    Mar 2019
    Location
    Hong Kong
    Posts
    126

    IBKR (HK) Stock Yield Enhancement Program - pros/ cons?

    Has anyone here tried Interactive Brokers' Stock Yield Enhancement Program and has first hand experience on the pros and cons/ risks?

    After digging a bit into it I came up with the following:

    Pros:
    * extra income

    Cons/ risks:
    * for dividend stocks/ REITs, when the stock is not recalled in time before the ex date it may happen that PIL (payments in lieu) instead of dividend is paid. However, if I'm not mistaken tax wise this should not make any difference at least here in HK?
    * potentially supporting the shorting of a stock you lend out
    * borrowed stocks are not "protected" in case IBKR goes bust


    Any feedback/ input will be much appreciated. Thanks!


  2. #2

    How much extra income?

    If IB is taking half the income paid by the stock borrower, is the remaining half worth the risk you are taking?

    Mirindix likes this.

  3. #3

    Join Date
    Mar 2019
    Location
    Hong Kong
    Posts
    126
    Quote Originally Posted by traineeinvestor:
    How much extra income?

    If IB is taking half the income paid by the stock borrower, is the remaining half worth the risk you are taking?
    The biggest risk here I could see would be to lose the lent out stocks if IBKR goes bust... or is there any other risk I don't see here?