So if I were to short sell an ETF, I know there are fees and margin requirements, but the dividend issue has me confused. I know the short seller owes the lender of shares the dividends, but what stumps me is who does the ETF's actual dividends go to? Maybe the short sellers brokerage, or the lender of shares brokerage? And what do they do with them- it almost sounds like a doubling up of dividend payments if I have to pay the share lender the amount of the dividends and they are also receiving the actual dividends from the company?
Or maybe those articles I read mean the dividends kind of go to me and my brokerage but they disappear from my account and are paid to share lender without me ever having access to them, and that is what they mean by “Borrower pays dividends”? If so that is like no net cost to borrower since dividend in equals dividend out…seems unlikely.
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