Hi, I just started getting interested in short trading and am using the Think or Swim paper trading account to get my feet wet. I'm noticing that many times I want to short a stock I can't because it's not available to borrow. Are there any online platforms which typically have the largest list of shortable stocks?
We have two ways to get a locate on hard to borrow stocks. The one from our clearing broker, Wedbush Securities, that have no cost to get the locate but will have a borrow cost if you hold overnight. We also offer a premium locate service that has a cost. Between the two, I'd say we are very competitive. Bob
In addition to what Bob said above, another one of our sponsors here is TradeZero and one of their claims is that they have access to supplies of hard-to-borrow securities, so you should check them out as well.
Your thread question asks about 'platform' -- and a trade long-or-short is a trade. (And so, some platforms lend themselves to quicker or less-quick trading, in-and-out, long-then-short, 'for sure.') But your narrative goes towards whether your active broker maintains a broad+deep list ("inventory!") of items to borrow/short. Well, along with that is cost-to-borrow, "Hello!" Which may be explicit fees, may be folded into broader costs (or sucked out of interest rates), or lumped in with platform fees, commissions, ticket costs, etc. Just between ToS, Lime, and Trade-0, there's enough variety that you'd want to have an idea of your general intended pattern of trades (for example, "How many trades per week? How many short trades per week?" etc), and see how the *collected* fees of each (at the end of a week or a month) add up. Hope that adds a little clarity....
Just remember shorting stocks by borrowing it, is very risky. Your risk to the upside is theoretically, unlimited! Too many traders ignore that fact. You could be on the hook for more monies than what you have in your account. If the stock you are shorting gaps up, you would be chasing to buy it back and close your position because your losses would be piling up!
TradeZero's short list is extensive and derived from the use of an automated proprietary system that blends multiple pools of easy to borrow lists. Hard to borrow shares can also be located for a fee. Feel free to email or call me to give you more details on our short list.
I'm actually looking to do quick trades ---- in and out in about an hour. Is this something that I could do online via TradeZero related platform?
Our platforms and services support all types of trading activities from active daily traders to mid and long term traders, so quick trades are not a problem. our platforms have multiple features that support your trading style. Feel free to test out a free delayed demo at the following link to check the different features our platforms offer. https://us.tradezero.co/trading-software
Thanks, Mohamed! Looks interesting... One question: What does it mean that the price of Hard to borrow share locates is "at cost"?