Customer's Loan Consent

Filed Under:
Dictionary Says

Definition of 'Customer's Loan Consent'


An agreement signed by the customer of an investment firm. The customer's loan-consent form authorizes the firm to borrow margined securities to the limit possible, given the customer's debit balance. This is done if it is necessary for the firm to cover other short positions by the firm, or the customer's failure to complete delivery.

Investopedia Says

Investopedia explains 'Customer's Loan Consent'


Since only securities that trade above a certain dollar amount are maginable - $5 for some brokers - the broker would not be able to borrow securities that trade below that threshold. This makes it very difficult, or impossible, to find shares to borrow for a short sale for securities trading at low prices.



comments powered by Disqus
Hot Definitions
  1. Closed-End Fund

    A closed-end fund is a publicly traded investment company that raises a fixed amount of capital through an initial public offering (IPO). The fund is then structured, listed and traded like a stock on a stock exchange.
  2. Payday Loan

    A type of short-term borrowing where an individual borrows a small amount at a very high rate of interest. The borrower typically writes a post-dated personal check in the amount they wish to borrow plus a fee in exchange for cash.
  3. Securitization

    The process through which an issuer creates a financial instrument by combining other financial assets and then marketing different tiers of the repackaged instruments to investors.
  4. Economic Forecasting

    The process of attempting to predict the future condition of the economy. This involves the use of statistical models utilizing variables sometimes called indicators.
  5. Chicago Mercantile Exchange - CME

    The world's second-largest exchange for futures and options on futures and the largest in the U.S. Trading involves mostly futures on interest rates, currency, equities, stock indices and agricultural products.
  6. Private Equity

    Equity capital that is not quoted on a public exchange. Private equity consists of investors and funds that make investments directly into private companies or conduct buyouts of public companies that result in a delisting of public equity.
Trading Center