I just called Etrade and asked the same question:

I just called Etrade and asked the same question:

What is their loan policy for shares in different types of accounts?

The Etrade rep's answer was similar to what Bumpercars posted from his broker:

1) Shares in a cash account or a margin account (with no margin debt) where cash is used to purchase shares can't be loaned out for shorting. So a margin account (with no margin debt) functions like a cash account with regards to whether shares can be loaned or not.

2) If you have a margin account and have margin debt (used to purchase more shares) all shares of any stock in that account can be loaned out by Etrade (without any payment to you).

3) If you want to have an account where you get paid for loaning out shares, Etrade has a special account called "Cash Account Fully Paid Lending" In this account they pay the customer for the loaned shares in a 60:40 ratio, with 60% of the loan fee going to the customer and 40% going to Etrade.

4) Again: "Locking up" shares at a high sell price does absolutely nothing in terms of whether they can be loaned out or not by your broker.