Väärtpaberiterminide

Väärtpaberiterminid, known in English as securities lending, is a practice where the owner of a security lends it to another party, typically a financial institution. The borrower pays a fee to the lender for the use of the security. This fee is usually expressed as an annual percentage of the market value of the borrowed security. The loan is collateralized, meaning the borrower provides assets, often cash or other high-quality securities, to the lender as security against the borrowed asset. This collateral is usually valued at a premium to the borrowed security to protect the lender.

Securities lending plays a crucial role in financial markets. It facilitates short selling, a strategy where investors bet on a security's price declining. Short sellers borrow securities to sell them, hoping to buy them back later at a lower price and return them to the lender, pocketing the difference. It also enhances market liquidity, making it easier for buyers and sellers to trade securities. Furthermore, lenders of securities can earn additional income on their holdings, which can improve portfolio returns.

The types of securities that can be lent include stocks, bonds, exchange-traded funds (ETFs), and other financial instruments. The term of a securities lending agreement can vary, from overnight to several months or even longer. The borrowers are typically investment banks, hedge funds, and other institutional investors. The lenders are often institutional investors such as pension funds, mutual funds, insurance companies, and asset managers. Risks associated with securities lending include counterparty risk, where the borrower defaults, and collateral risk, where the value of the collateral falls below the value of the borrowed security.