cost for shorting stocks at IB

Hello,

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,
CALLumbus

 

$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.

 

margin rates are so low it's outrageous. That's why anything can happen in the stockmarket.

 

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

 

When I read this page toroughly, my guess is:

http://www.interactivebrokers.com/en/accounts/fees/interest.php?ib_entity=llc

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.

 

See also:

http://ibkb.interactivebrokers.com/node/41

I hope -0.12 means paying 1,2% (instead of 12%).

Currently at some stock you see -0.12, the BM for the $ currently is 1,2% so these probably align...

 

Looks like IB is improving the way borrow/lend will work, including transparency for fees:

http://www.interactivebrokers.com/en/software/pdfhighlights/PDF-StockLoanBorrow.php?ib_entity=llc

 

How do you add that page in TWS ?

 

That's in 899 allegedly. I haven't tested this yet but here are the release notes:

http://individuals.interactivebrokers.com/en/software/releaseNotes/TWS_Notes_899a.php

"AQS®, the first automated, centrally-cleared electronic marketplace for stock borrow and loan transactions"