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lending at a rate

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Financial Dictionary

lending at a rate

The payment of interest by a broker-dealer on a customer's credit balance from a short sale. When the investor sells short, the broker holds the proceeds from the sale in escrow to secure the securities borrowed for the short sale. In certain instances the broker may pay the customer interest on this balance.

Wall Street Words: An A to Z Guide to Investment Terms by David L. Scott.
Copyright © 2003. Published by Houghton Mifflin.
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