IB auto-locate

Discussion in 'Retail Brokers' started by alanm, Apr 3, 2006.

  1. alanm

    alanm

    Apparently, the auto-locate system at IB is now operational. I got the following message some time after attempting to short DUK this morning:

    "You recently attempted to enter one or more short sale orders in securities which were not available for shorting at that time. We have located shares on your behalf so you should be able to enter short sale orders for these titles within the next minute(s).

    Stock Description Symbol Exchange Rate

    DUKE ENERGY CORP DUK NYSE 0.2100

    The indicative rates shown are the additional costs to borrow these securities above the normal borrow rates. The effective cost to borrow will be determined at the time the borrow is actually established.

    ..."


    First of all, this is pretty cool :)

    Can someone from IB comment on the exact meaning of 0.2100? Is this $0.21 per share per day, or is this some percentage, and, if so, how does that equate to an actual dollar cost?
     
  2. Htrader

    Htrader Guest

    Yeah, I wish it would move a bit quicker. The two times I've seen this message, it was several hours after I had originally tried to short the stock.
     
  3. Several hours is not good enough, i think! Ideally you should be able to determine if you'll be able to short a stock or not before the open or at least soon after the time you intended to short it. I hope the system improves to become truly "electronic" (ie minimal delay), otherwise what's the point of doing it via the software as opposed to calling the stock loan desk?

    Also I was under the impression that no charges are levied in this "locate" process or at least no charges are levied if you cover the short position by the close. IBj or anyone from IB care to comment?
     
  4. I agree with the other posters that the locate is way too slow.

    It would be nice to be able to send manual locate requests premarket and get shares located before open.

    This is a great concept that just needs some tweaking to be effective.
     
  5. MR.NBBO

    MR.NBBO

    I've got better things to do than call stock loan desks...so this new IB feature is really nice.
    All considering, I think it's fast enough, given the process of finding a Hard-to-Borrow.

    I believe IB said that this was the additional interest rate cost, but a good solid clarification from them would be nice.

    Is this the rate subtracted from short interest paid?
     
  6. JackR

    JackR

    From another thread with a post by IBj:

    3.5 means 3.5% as the benchmark for the rebate rate calculation (instead of the daily posted BM which is today around 4.55%) in the event you actually short the stock. This is an indicative rate only.

    It seems to me the problem with posting a real rate is that it can change because it is (for US $) based on the LIBOR and your account margin balance.


    Jack
     
  7. alanm

    alanm

    I saw the previous post on the subject, but asked for clarification because the previous post (3.5) looks nothing like the number I got (0.2100).
     
  8. zdreg

    zdreg

    .
    you obviously have a short timeline. sometimes a stock becomes availabile
    a few hours. later. it is nice to get a headsup via a bulletin even if sometime later. the opportunity to make money may still be there.
     
  9. m22au

    m22au

    Are there any bulletins / notices etc. about auto-locate?

    The first I read about it was in this thread.
     
  10. that's why I troll ET.
     
    #10     Apr 4, 2006