I worked as a trader for 10+ years in my 28+ years career in...

I worked as a trader for 10+ years in my 28+ years career in financial markets, so yes I know a thing or two. The money a lender generates from loaning their shares can be used to pay to shareholders as gains/dividends, buying more shares, even borrowing shares to short.



Active managers are always pressed to show performance above the index. Therefore; they in no way can survive without using their assets in the fund in many ways they can. Strategies can be using put/call options, futures, using cash flow from loaning out to cover expenses etc. Two or more large investors can manipulate the stock price by lending stock to each other and shorting and covering at the same time. It's a fallacy to think that on a trading desk there will be Chinese walls, the bosses can see the entire order flow and executions on their systems. Traders only care about their profits, commissions and bonuses.



The game is definitely rigged against an individual investor IMHO. His survival will depend upon finding a gem in the hay stack and holding it for the long term. Amongst the traders only the 1% professional traders make money the rest 99% get slaughtered.