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Old Aug 30th, 2012, 02:47 AM   #7
Daal
 
 
Join Date: Oct 2002
Location: Brazil
Posts: 9,192
OneChicago, what happens if you short a SSF in a extremely hard to borrow stock and the future expires, do you ALWAYS get assigned the short position?Who usually own the shares that are assigned to you?

I basically want to know if its possible to not get the short because shares were not located or get the short but get bought-in shortly after
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Old Aug 30th, 2012, 09:38 PM   #8
ScroogeMcDuck
 
 
Join Date: Aug 2012
Location: Los Angeles
Posts: 1
You have to deliver one way or another, so if you can't locate shares to borrow you have to buy in.
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Old Aug 31st, 2012, 07:52 AM   #9
Daal
 
 
Join Date: Oct 2002
Location: Brazil
Posts: 9,192
Quote:
Quote from Daal:

OneChicago, what happens if you short a SSF in a extremely hard to borrow stock and the future expires, do you ALWAYS get assigned the short position?Who usually own the shares that are assigned to you?

I basically want to know if its possible to not get the short because shares were not located or get the short but get bought-in shortly after
OneChicago, please respond
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Old Aug 31st, 2012, 09:03 AM   #10
comintel
 
 
Join Date: Jun 2008
Posts: 1,244
BTW I found that the bid - ask spreads on most SSF's were too wide for my purposes.

It is also hard/impossible to get executions other than by paying the full bid or ask.
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Old Mar 28th, 2013, 11:47 AM   #11
mskl
 
 
Join Date: Nov 2001
Posts: 438
This exchange has a product that could take off if they were to market it properly. Just take a look at all the people who are bullish in todays market and love some of these hard to borrow names. They are offered at discounts in the SSF market or would constantly trade at these discounts via SSF's yet the Exchange doesn't market this to the investment community. Instead they focus on trying to get the individual to trade the common names at bad prices (spreads) or develop products (1D) taking one element out of the equation making the product closer to an equity security. Or they market the "tax" advantages of their products and how investors can "arb" the tax man. Take note of the open interest in Canadian securities. This tax arb won't last - someone will figure it out and expose these traders (Cdn banks etc)

This exchange will close if they don't use their niche to "take" part of the securities lending market.

First thing that should be done is all the HTB names should be listed on the exchange. Then an active market should be established based on the securities lending rates - thus many SSF's would be offered at a discount where the bulls would have a field day buying the securities they love at lower prices. Some HTB names would then be shortable to the Bears with no risk of spiking lending rates and potential buy-ins.

Seems obvious to me....
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Old Mar 28th, 2013, 12:02 PM   #12
Daal
 
 
Join Date: Oct 2002
Location: Brazil
Posts: 9,192
Quote:
Quote from mskl:

This exchange has a product that could take off if they were to market it properly. Just take a look at all the people who are bullish in todays market and love some of these hard to borrow names. They are offered at discounts in the SSF market or would constantly trade at these discounts via SSF's yet the Exchange doesn't market this to the investment community. Instead they focus on trying to get the individual to trade the common names at bad prices (spreads) or develop products (1D) taking one element out of the equation making the product closer to an equity security. Or they market the "tax" advantages of their products and how investors can "arb" the tax man. Take note of the open interest in Canadian securities. This tax arb won't last - someone will figure it out and expose these traders (Cdn banks etc)

This exchange will close if they don't use their niche to "take" part of the securities lending market.

First thing that should be done is all the HTB names should be listed on the exchange. Then an active market should be established based on the securities lending rates - thus many SSF's would be offered at a discount where the bulls would have a field day buying the securities they love at lower prices. Some HTB names would then be shortable to the Bears with no risk of spiking lending rates and potential buy-ins.

Seems obvious to me....
I agree. SSFs are a brilliant idea because they do away with all the nonsense that gets people pissed off because you are borrowing shares from someone else to sell (how unpatriotic) and as a result lead to this regulatory nightmare of buyins, no shares available, sky high borrow rates. SSFs could be a big market if they had more names and better liquidity.

Sometimes I want to buy a hard to borrow stock at a discount but the SSF market maker won't let me and will have abusive asks on the spread. There is pretty much nobody in these things except for the market makers
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