They refer to the same concept, namely, which interest rate bracket you are in which is based on the amount of money applicable. In this case, the total short stock value would determine which short rebate tier you fell into. The difference in tiers is that as you have bigger short positions, you get better interest on the long cash resulting from the short sale proceeds. Obviously, this is account specific, hence my use of "yourTier". I would like to clarify my statement on costs. The rate is the additional cost to IB as I stated. We do pass this additonal cost to the borrower. I am not sure if I was clear on the latter point.
Can a customer select, for each order attempting to sell short, whether to enable or to disable the auto-locate process for that particular order?
Nope. It is fully automatic. We assume if you tried to short, it is because you want to be able to sell short and we will try to enable that for you. The only reason to make it an optionable feature would be to not have certain short sale attempts count toward a rating where this rating may affect the priority we give to your future short sale locate requests (imputed). Kind of a un-on sentence but I hope it is understandable.
Yes, I think I understand you. You anticipated the purpose of my question. It seems to me that everybody would benefit, were such a choice included, to disable auto-locate selectively, on an order-by-order basis. The trader would benefit in the way you have already mentioned. IB would benefit, because IB would avoid unnecessary workflow. It seems to me that sometimes, some traders would be determined to short a stock, even if a delay is involved so the auto-locate system can do its thing. It seems to me that at other times, some traders would have a time-critical, fill-or-kill type of strategy, so that they would not wish to short if they cannot do so immediately, would not wish to impose needless auto-locate workflow on IB in such a situation, and would not wish to harm their own customer rating and to jeopardize future their future prospects for benefitting from the auto-locate process. If I am incorrect, and the burden of allowing this option would cost more than the auto-locate workflow avoided by it, then it would seem my suggestion is misinformed.
As someone who shorts primarily "hard-to-find" stocks and does it 50 times/day... The current IB-locate system is dysfunctional and virtually useless... It's worse than nothing... I read your algo... It ends up being unfair to various parties. (1) You selectively told only certain people about existence of system. (2) At any point... is the stock being looked for? Or is stock "black-balled"? (3) Have you "blackballed" the trader because only 50% of his shorts fill... But allow crazy REL orders that change 10,000 times/day? (4) Is someone paying more and getting the stock... even though I would pay double? The trader has no idea what is going on at any time... Other than once a week you "win a lottery" and get stock you wanted to short 3 hours earlier. This may be a cool computer algorithm written by a talented programmer... But a good Stock Loan department can find a few 1000 shares of almost any stock in 5-10 minutes. Though your intentions may be "good"... To skim the ** easiest possible money ** from a few phone calls... The IB-locate system as designed is an insult to most of your professional shorts. You have to give us some control: (1) To request a stock (2) To give us status within max 15 min - yes/no (3) Allow bidding for high demand stock (4) To shut off system if worthless... like right now Stock Loan departments are BIG profit centers for Clearing Firms. I think that IB's "religion" is costing eveybody a lost of money here. rm+
You may not have experienced this yet... But sometimes stocks move... That is... they go up... they go down (in price). Market events happen... things change. Someday, my boy, when you are grown... you will understand. rm+
Also... Another issue if someone from IB is still tracking this thread. IB should find a way to inform traders when a stock becomes available to short mid-day. Right now I have a custom web crawler that scans your list... And determines changes so I can boil down new entries. This is ** incredibly inefficient **... At my end and at your end. Why can't you post a list of "new shortable stocks"... Let's say made available in the last 15 minutes. I'll bet lots of people would scan that list and grab the stock. rm+
Also... Another issue if someone from IB is actually tracking this post... as promised. You post your morning Shortable List at roughly 7:00 AM EST. I read the list with my web crawler. One hour later at roughly 8:00 AM EST... Many of the "hard-to-find" stocks are gone... even though NO TRADING HAS TAKEN PLACE. (I know these stocks trade 95% NYSE... zero on ECNs pre-9:30). Live short orders that I had entered... Between 7:00 and 8:00 AM EST and been accepted by the system... Are often canceled by your computer. What is happening between 7:00 and 8:00 with your "hard-to-find" shorts? I just seems like ** basic ethics **... That you would tell your professional traders how the Shortable Stock system works... It's actually in ** everybodies interest **... If you told me what's going on... we would both make more money. rm+
I think you have missed the point: the IB Stock Locate System is completely egalitarian. All IB clients have equal access to it. You don't need to subscribe or pay for it; you don't need to do anything differently than you always do/did. In fact, you don't even need to know it is running since that knowledge should not change anything you would normally do. The use (or non-use) of the system does not cost you, or any IB client, a single penny. Before critiquing our system, ask the following question: are you better off with it, or without it? Remember, prior to this, if a stock was unavailable, it was just unavailable, period. Now, there is a chance we will look for it and maybe even find it. Your statements about SLB practices, stock availability and response times are inconsistent with our experience. You may wish to reconsider your assumptions, or do your shorting with someone who provides you the personalized, on demand real-time locate searches you feel are so readily available. As a side note, if you feel that you are somehow worse off, then please send us a request by Web/Inquiry Ticket (upper left corner of account mgmt) and I will have your account excluded somehow from consideration. It doesn't make much sense to me, and we will have to build something to exclude an account, but we will accommodate you if you feel strongly about it.
"As a side note, if you feel that you are somehow worse off, then please send us a request by Web/Inquiry Ticket (upper left corner of account mgmt) and I will have your account excluded somehow from consideration. It doesn't make much sense to me, and we will have to build something to exclude an account, but we will accommodate you if you feel strongly about it." this is a slippery slope towards favoritism when you start to accoomodate one client with a loud voice. the IB model is based upon treating all clients in the same way.