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Term stock loan: Difference between revisions
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{{g}}{{a|gmsla}}An unusual type of [[stock loan]] where the {{gmslaprov|Lender}} agrees to a [[fixed term]] during which it cannot call back the {{gmslaprov|loan}} without the {{gmslaprov|Borrower}}’s agreement. | {{g}}{{a|gmsla|'''Term stock loan: Like a normal stock loan, only the usual provisions }}An unusual type of [[stock loan]] where the {{gmslaprov|Lender}} agrees to a [[fixed term]] during which it cannot call back the {{gmslaprov|loan}} without the {{gmslaprov|Borrower}}’s agreement. | ||
This is an unusual arrangement, since generally [[stock loan]]s are meant to cover [[short sale]]s where the Borrower, by definition, doesn't know how long it wants the stock, or when it will want to terminate the loan — [[Short-seller|short-selly]] [[hedge fund]] dude is waiting for the market to tank so {{sex|he}} can buy the borrowed stock back in, settle his loan make a huge profit, right? — and seeing as that is an open-ended arrangement <ref>[[The market can stay irrational longer than you can stay solvent]] as Bill Ackman would ruefully tell you.</ref> a run-of-the-mill [[stock loan]] is [[callable]] at any time.<ref>the Borrower might need its stock back on any day — if it does, short-selly [[hedge fund]] dude can borrow in more from someone else and return that to the original lender, slosing out the first loan. End of the day, he remains short one [[stock loan]].</ref>. | This is an unusual arrangement, since generally [[stock loan]]s are meant to cover [[short sale]]s where the Borrower, by definition, doesn't know how long it wants the stock, or when it will want to terminate the loan — [[Short-seller|short-selly]] [[hedge fund]] dude is waiting for the market to tank so {{sex|he}} can buy the borrowed stock back in, settle his loan make a huge profit, right? — and seeing as that is an open-ended arrangement <ref>[[The market can stay irrational longer than you can stay solvent]] as Bill Ackman would ruefully tell you.</ref> a run-of-the-mill [[stock loan]] is [[callable]] at any time.<ref>the Borrower might need its stock back on any day — if it does, short-selly [[hedge fund]] dude can borrow in more from someone else and return that to the original lender, slosing out the first loan. End of the day, he remains short one [[stock loan]].</ref>. | ||