Saturday, October 24, 2009

Stock Loan Items

 
Stock Loan
 
A Stock Loan is quite simply the lending of funds secured /collateralized by shares of publicly traded stock. A stockholder can simply leverage the value of his stock and achieve liquidity inside a few days, without really selling the shares. The terms are reasonable and the shares are safely returned upon repayment of the loan.

There are numerous benefits that place a true stock loan at the leading edge of choices when making an attempt to leverage one instruments without selling outright. Well, selling really isn't that good an option. But what about a margin loan? It used to be, but sophisticated stockholders and investors are moving from the margin environment to a hedged stock loan from a handful of private banking groups who offer much more interesting terms.

Compared with the traditional margin loans, it offer the flexibleness of being able to walk away from the loan at anytime without wounding the credit rating or having to bring in further collateral or cash.

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