eToro
announced today (Thursday) the launch of a stock lending program that will
allow its users in the UK and Europe to earn passive income by lending their
stocks to borrowers. The Israeli fintech is thus following in the footsteps of its competitors in the online retail trading market, including Robinhood, which has been offering similar solutions for some time.
The
initiative represents a significant expansion of eToro’s existing relationship
with BNY, which will act as the custodian for the new offering. Stock lending
platform EquiLend will identify potential borrowers and facilitate the lending
process.
“Stock
lending has traditionally been the preserve of large financial institutions and
it’s been much harder for retail investors to earn passive income in this
way,” said Yossi Brandes, VP of Execution Services at eToro.
“Leveraging
BNY’s Global Clearing services, we want to level the playing field by enabling
millions of eToro users across the UK and Europe to engage with stock lending
in an easy and transparent way,” he added.
The program
will initially be available to higher-tier eToro Club members—those with
Platinum, Platinum+, and Diamond status—before being extended to other users
at a later date.
eToro has been in the spotlight recently due to its planned IPO on Nasdaq under the ticker ETOR. The latest market disruption caused by Donald Trump’s tariff announcements has led the company to pause its IPO roadshows as it “evaluates market conditions.”
How It Works
Users who
choose to participate must opt in, after which their entire portfolio of
eligible stock positions will be considered for lending. Only whole unit “real”
stock positions qualify. CFDs and fractional shares are excluded.
Participating
users will receive monthly statements tracking their income when their stocks
are successfully loaned out. Securities with low market liquidity, high
volatility , and high demand are more likely to be borrowed and generate higher
earnings.
While
stocks are on loan, users temporarily transfer ownership to borrowers and
forfeit voting rights. However, they continue to receive dividends and retain
the ability to sell their stocks or opt out of the program at any time without
incurring costs.
How Mach Can You Earn
While not
explicitly detailed in the initial announcement, eToro has provided
a formula in its help center for calculating potential earnings.
“Participants
will receive monthly payments, equivalent to 50% of the net revenue eToro earns
and receives from our partners for these lending transactions. The actual
income from stock lending will likely vary from month to month depending on the
market demand for the stock,” eToro
explains in their FAQ.
The final
values will depend on which assets are lent, the number of shares, and the
variable lending fee, which fluctuates due to market supply and demand.
In eToro’s
example, they indicate that the lending fee rate is 1%, the facilitation and
maintenance cost is 15%, and eToro’s revenue share is 50% (remember those values
are not fixed). The example referenced a relatively substantial investment of
2,000 Tesla shares at a price of $350 each, totaling $700,000. How much does
eToro offer for a loan lasting 112 days (nearly 4 months) with this amount?
Just over $925.
Is that a
lot? Considering that the funds are already tied up in stocks, it’s certainly a
nice bonus and additional “dividend” from owning shares. However, for
retail investors with typically much smaller portfolios, the profits will
likely be rather symbolic.
For comparison, the stock lending program introduced by Swissquote, which has been functioning since 2024, offers an annual interest rate of over 5% for selected, most popular stocks. However, looking at Robinhood’s offering, which implemented a similar solution in 2022, the terms are very comparable. The same applies to the Stock Yield Enhancement Program (SYEP) Derivatives introduced by Interactive Brokers in 2023.
Therefore, it can be concluded that eToro is not deviating from market averages in this regard.
Expanding Financial Access
Through
BNY’s Global Clearing platform, eToro’s users can access over 19 exchanges
globally, with integrated solutions for clearing, custody, settlement,
execution, and financing.
“We
are pleased to expand our relationship with eToro, supporting a holistic
solution set across clearing, settlement , custody, foreign exchange, cash
management,” Victor O’Laughlen, Head of Global Clearing at BNY, commented on
the expansion. “This development represents the very best of eToro, Equilend
and the heritage and innovation of BNY’s world-class platform.”
eToro is
providing educational resources on its platform to help users understand
potential income opportunities and risks associated with stock lending.
Dan
Dougherty, Managing Director, Global Head of Sales & Account Management at
EquiLend, noted that the collaboration “marks a significant advancement in
the securities lending market,” enabling eToro to enhance its services
with a fully paid lending program.
The
European Securities and Markets Authority (ESMA) has issued guidance noting
that while securities lending may generate extra returns, it can also introduce
additional risks, including counterparty and collateral shortfall risk. The
authority unveiled some measures in 2023 to curb securities lending to retail
investors.
As FinanceMagnates.com
informed this week, Shir Shalom, who led various projects related to risk
management at eToro, has announced her departure from the financial trading
platform after serving nearly four years in various leadership roles. “Forever
an eTorian,” she wrote on her socials.
eToro
announced today (Thursday) the launch of a stock lending program that will
allow its users in the UK and Europe to earn passive income by lending their
stocks to borrowers. The Israeli fintech is thus following in the footsteps of its competitors in the online retail trading market, including Robinhood, which has been offering similar solutions for some time.
The
initiative represents a significant expansion of eToro’s existing relationship
with BNY, which will act as the custodian for the new offering. Stock lending
platform EquiLend will identify potential borrowers and facilitate the lending
process.
“Stock
lending has traditionally been the preserve of large financial institutions and
it’s been much harder for retail investors to earn passive income in this
way,” said Yossi Brandes, VP of Execution Services at eToro.
“Leveraging
BNY’s Global Clearing services, we want to level the playing field by enabling
millions of eToro users across the UK and Europe to engage with stock lending
in an easy and transparent way,” he added.
The program
will initially be available to higher-tier eToro Club members—those with
Platinum, Platinum+, and Diamond status—before being extended to other users
at a later date.
eToro has been in the spotlight recently due to its planned IPO on Nasdaq under the ticker ETOR. The latest market disruption caused by Donald Trump’s tariff announcements has led the company to pause its IPO roadshows as it “evaluates market conditions.”
How It Works
Users who
choose to participate must opt in, after which their entire portfolio of
eligible stock positions will be considered for lending. Only whole unit “real”
stock positions qualify. CFDs and fractional shares are excluded.
Participating
users will receive monthly statements tracking their income when their stocks
are successfully loaned out. Securities with low market liquidity, high
volatility , and high demand are more likely to be borrowed and generate higher
earnings.
While
stocks are on loan, users temporarily transfer ownership to borrowers and
forfeit voting rights. However, they continue to receive dividends and retain
the ability to sell their stocks or opt out of the program at any time without
incurring costs.
How Mach Can You Earn
While not
explicitly detailed in the initial announcement, eToro has provided
a formula in its help center for calculating potential earnings.
“Participants
will receive monthly payments, equivalent to 50% of the net revenue eToro earns
and receives from our partners for these lending transactions. The actual
income from stock lending will likely vary from month to month depending on the
market demand for the stock,” eToro
explains in their FAQ.
The final
values will depend on which assets are lent, the number of shares, and the
variable lending fee, which fluctuates due to market supply and demand.
In eToro’s
example, they indicate that the lending fee rate is 1%, the facilitation and
maintenance cost is 15%, and eToro’s revenue share is 50% (remember those values
are not fixed). The example referenced a relatively substantial investment of
2,000 Tesla shares at a price of $350 each, totaling $700,000. How much does
eToro offer for a loan lasting 112 days (nearly 4 months) with this amount?
Just over $925.
Is that a
lot? Considering that the funds are already tied up in stocks, it’s certainly a
nice bonus and additional “dividend” from owning shares. However, for
retail investors with typically much smaller portfolios, the profits will
likely be rather symbolic.
For comparison, the stock lending program introduced by Swissquote, which has been functioning since 2024, offers an annual interest rate of over 5% for selected, most popular stocks. However, looking at Robinhood’s offering, which implemented a similar solution in 2022, the terms are very comparable. The same applies to the Stock Yield Enhancement Program (SYEP) Derivatives introduced by Interactive Brokers in 2023.
Therefore, it can be concluded that eToro is not deviating from market averages in this regard.
Expanding Financial Access
Through
BNY’s Global Clearing platform, eToro’s users can access over 19 exchanges
globally, with integrated solutions for clearing, custody, settlement,
execution, and financing.
“We
are pleased to expand our relationship with eToro, supporting a holistic
solution set across clearing, settlement , custody, foreign exchange, cash
management,” Victor O’Laughlen, Head of Global Clearing at BNY, commented on
the expansion. “This development represents the very best of eToro, Equilend
and the heritage and innovation of BNY’s world-class platform.”
eToro is
providing educational resources on its platform to help users understand
potential income opportunities and risks associated with stock lending.
Dan
Dougherty, Managing Director, Global Head of Sales & Account Management at
EquiLend, noted that the collaboration “marks a significant advancement in
the securities lending market,” enabling eToro to enhance its services
with a fully paid lending program.
The
European Securities and Markets Authority (ESMA) has issued guidance noting
that while securities lending may generate extra returns, it can also introduce
additional risks, including counterparty and collateral shortfall risk. The
authority unveiled some measures in 2023 to curb securities lending to retail
investors.
As FinanceMagnates.com
informed this week, Shir Shalom, who led various projects related to risk
management at eToro, has announced her departure from the financial trading
platform after serving nearly four years in various leadership roles. “Forever
an eTorian,” she wrote on her socials.
