cost for shorting stocks at IB

Discussion in 'Retail Brokers' started by CALLumbus, Jul 4, 2009.

  1. CALLumbus



    I never totally understood what costs I have to calculate if I short stocks for longer term. Lets say I want to short First Solar (FSLR) for a short position value of 100000 $. What will I have to pay for borrowing the shares that I am going short ?
    I am with IB and I checked the Infos they have. They have a tool in the account management that shows if the stock is available for short (and how many of it) and a "current indicative rate" (see the attached screenshot). So the screen shows a rate of -0.62 ! But what does this exactly mean, how are my costs calculated ? Is this 0.62% of the 100000$ I am short in FSLR ? This would seem pretty low to me (only 620$ for a 100000$ short position) !

    It would be nice if you could help me to better understand how to calculate the FULL costs for a short position that I have to expect if I want to hold a short position longer term.

    Thank you,
  2. gkishot


    $620 annual fee on $100000 short position. That might change. You should look at historical rates. 0.62% is a borrowing rate that they say you need to pay to borrow stock from those who has it long. This is not a margin rate that you will pay directly to IB for borrowing cash from them.
  3. margin rates are so low it's outrageous. That's why anything can happen in the stockmarket.
  5. dcvtss


    If I recall, it shows up as negative accrued interest on your "account" window in TWS.
  6. teun


    When I read this page toroughly, my guess is:

    That's it indeed -0,62% (could also be 6,2% btw, you can't tell from the AM page).

    But that's only because it's below tier 1, I would say that when it's above tier 1 it is BM - 1,25% - 0,62% (if BM - 1,25% > 0, etc.).

    This one is really unclear, unusual for IB.
  7. teun


  8. WinSum


    How do you add that page in TWS ?
  9. #10     Oct 14, 2009