Securities Lending

[Jasi]

Hi
I am wondering if following is possible with your facility (or a new facility)
Unlike the conventional securities lending i.e for short selling would it be possible to borrow stock for “Covered Call writing”

Say XYZ is trading at $10 and I borrow 1000 XYZ for a period for 3,6 or 9 months and pay interest on the nominal value of 10 x 1000 = 10000 at a % attractive to the lender

Then I sell covered call option on the same security.

At the expiry of the borrowing period if stock is below 10 I simply return the stock to the lender

If stock is at or above 10 then I might get exercised on the option and receive 10000 from the market and return this nominal value to the lender of the stock
I will appreciate if you let me know any broker on US/UK or Australian market offers this

One of the reason for borrowing stock mentioned on the Australian Security Lending asociation is as follows

2. Borrowing for Margin Requirements.

To meet margin requirements, for example at the Exchange Traded Options Market. Securities can be borrowed cheaply and lodged as margin, rather than depositing cash

 

[dantes]

Jasi, what you are proposing does not really make sense. What you want is someone to lend you stock at some % and then give you a free call with strike $10 (how else would you be able to return 10,000 instead of the stock?). Lets assume someone would be willing to factor in the value of the call in the % you pay on the stock loan (hard but theoretically possible); all you have then is short one call, long one call and a stock loan. Why would you want that?