“Easy-to-short” list ... are all brokers the same?

Discussion in 'Stocks' started by abattia, Mar 25, 2010.

  1. Assume I want to short an actively traded stock.

    As a retail trader, what can I do to increase my chances of being able to locate that stock for a short?

    Are all brokers equally good/bad at this (because say it just depends 100% on market-wide supply/demand factors)?

    Or are there “broker competence” factors at play, too?

  2. Its not about the brokerage, its about the clearing firm. Sometimes you have a self clearing firm like IB but most firms use: Merril, Penson, Goldman, Pershing, and a few smaller ones.
  3. Thanks for clarifying. I did not realise this.

    I guess I should have titled this thread " ... are all clearing firms the same?"

    Are all clearing firms/self clearing firms equally good/bad at this (because say it just depends 100% on market-wide supply/demand factors)?

    Or are there “competence” factors at play, too, making some clearing firms/self clearing firms better than others?

  4. lescor


    They're not all the same. I have accounts at IB and a firm that clears through Merrill. IB is way better for short availability.
  5. IB short list is on their website. In general, they will have about everything you need unless you want something goofy, like warrants, unit, etc...

    Goldman and Merril, in my opinion are not very good for locating. Same with the smaller firms.

    Penson is good but they are a hassle.

    Pershing is the biggest and has the most, but not many retail brokerages use them.
  6. Thanks, Lescor and Rehoboth

    My broker uses Penson.

    Why are Penson a hassle?
  7. Just the method of locating isnt as fluid as others. If you broker already has a good system in place that doesnt have too much hassle on your end then that is good.

    I was also going to say that there are some brokerage that have multiple clearing firms and they provide a combined short list that can be just about everything.
  8. ET70424


    How does IB compare with LightSpeed in terms of short sale share availability?

    Anyone care to comment?
  9. ET70424


    Can you name the brokerage firm(s) that use multiple clearing firms?
  10. def

    def Sponsor

    It is NOT about having multiple clearing firms. It is about the relationship the brokers have in place with stock lenders, the number of firms that they have agreements with and the books in which they have access. Many of the large custodians will only deal with firms that borrow over a certain amount of stock or have a large capital base. In IB's case, we're able to have relationships with multiple banks and custodians due to our group capital base (~ $5 billion) and our sizable global book.
    #10     Sep 22, 2010