(Bloomberg) Robinhood Markets Inc. has initiated a plan to allow users on the platform to loan out their stocks to other financial entities.
Dubbed the Stock Loan Income Program or SLIP, the program is seen as an attempt by Robinhood to take on conventional brokerages.
Robinhood says the new feature will be available in the next months, within the first half of 2022, with the beta version said to have entered the iPhone app.
SLIP users will have an opportunity to generate passive income through the lending of equities to other institutions. The institutions can borrow the stocks to facilitate short sales or settle trades.
Users will reportedly be able to buy and sell stocks as usual, even when their stocks are on loan. The passive incomes will, however, depend on investor demand and the shares will only be secured by cash collateral of the user, held by Robinhood.
Robothood’s lending program will mirror those of rivals such as Fidelity Investments, Charles Schwab Corp, and Morgan Stanley’s E*Trade.
HOOD: NASDAQ closed up +15.76% on Wednesday
