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Gain investment opportunities for covered short selling, arbitraging
or hedging. You can lend or borrow securities to take advantage of
prevailing market conditions, for example earn potential profits in
a bear market by borrowing shares to short sell.
We offer a flexible quantum of borrowing; up to 2 times the collateral pledged, subject to our discretion. We have a wide range of securities for borrowing and we accept a wide range of securities (including cash) as collateral. Borrowing periods are negotiable and we do not charge maintenance fees on your Securities Borrowing and Lending account.
Assume you think that company ABC has a poor outlook in the coming months. Right now the stock is trading at SGD25, but you see it trading much lower than this price in the future. You decide to short sell this stock:
Borrowed and short sold 1,000 shares of stock ABC at SGD25
Bought and returned 1,000 shares of stock ABC at SGD20.
|Your Gross Profit*||SGD5,000|
* Excluding brokerage/commission, clearing fees, SGX trading fees, borrowing costs, and relevant GST.
Benefit from market inefficiencies arising from product mispricing. E.g. buy a long futures contract on a security and short sell the underlying security.
Investors who are expecting to receive shares, options, rights, bonuses etc in due time can borrow the shares first, prior to receiving them, and sell them in the market to lock in the price that they want, and, upon receipt of the shares, return them to the lender.
Investors should consider the following risks which are applicable to Securities Lending and Borrowing: