Can someone explain the new Robinhood Stock Lending? It seems like an offer of free money but the risk isn't explained well.

Can someone clarify it please?

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If you own a stock and allow lending, you allow HOOD to loan that share to a short seller. HOOD gets paid to transact and you get a cut (very tiny). Problem is, short selling’s game is to inevitably drive down the price of the stock. So while you may make some pennies by lending your stock, the selling pressure from short sellers might cause your stock price to decrease. Beneficial for you if it’s a long-term hold and you want to continue dollar cost averaging down on the stock when it does drop but not beneficial if in your time horizon, your goal is to sell for a gain. Hope that helps

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I'm a long term / dividends investor, basically want to get to a place where my dividends pay for my living. Estimate between $1M-$1.4M in dividends stocks held for that to be nice.

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Sounds like you would be the counterparty of a shortseller.

While I think there was money to be made shortselling the last few years, I don't feel that a great longterm strategy.

I like ownership and hold and long with dividends cause you get a little something typically every quarter. And assuming a long hold, the stock will likely appreciate over time as well where minor losses or gains aren't realized in thay short-term, constant watching.

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