YES Bank shares attract hefty SLB premium, high volatility can add risk

The SLB mechanism allows traders to borrow securities that they may not have to meet their obligations

Those holding YES Bank shares are charging a significant premium for lending them through the securities lending and borrowing (SLB) scheme.

The difference in price between the cash market and the futures segment has contributed to the premium amid troubles at the bank, said experts. The annualised cost of borrowing YES Bank shares is as high as 244.6 per cent, showed the data from brokerage house Motilal Oswal Securities.

Yogesh Radke, head of alternative and quantitative research at Edelweiss Securities, said the premium is largely because of the difference in cash-market and futures-market prices. The futures market has been trading