Speaking for IB, hard-to-borrow fees, if any, are not assessed until the shares are actually borrowed at the settlement date, T+3 (this assumes that you do not pre-borrow). If you close out your short sale on the same day the trade was opened, you're position will be flat at settlement and you will not incur any borrow fees. Note, however, that the broker still needs to be able to perform a locate in order for you to initiate the short sale order. As for why shares which are non-marginable may be available for lending, clients may hold non-marginable shares in the same account as marginable, and to the extent a broker has the right to apply a margin lien for pledge/loan purposes, they can apply that to any shares held in the account, subject to the dollar limit. If you have a particular security that you are interested in shorting and would like to know the current availability, send me a PM.
I would want to be upfront with my clients about all the "gotchas" so they wouldn't be pissed when they were surprised by fees. I run a business, and I never never never want my customers to be surprised by fees, especially one's they wouldn't reasonably expect. I also would never leave out important information, i.e. if they ask me about a particular scenario I'll tell them all the pluses and minuses, which in this case IB didn't do. If I don't want customers to do something, I don't offer the service. It's that simple. Oh, and I hire customer service reps who are experts in our field and friendly and helpful. IB hires the least competent and least helpful people they can find to staff their customer service. IB is free to set up whatever crazy margin and rounding schemes they want as well as provide worthless and hostile customer service, and I'm free to make sure everyone knows about them since IB certainly isn't going to go out of their way to tell anyone. If you or anyone else still want to go with them, knock yourself out.
your reply shows that you are extremely knowledgeable and detailed oriented. of course the devil is in the details. how come you are still there? for the sake of balance why don't you list the positives that keep you there.
Oh I'm long gone. But they pissed me off so much I make sure that every other unsuspecting potential customer doesn't have to go through the pain I did. Their pluses were originally low commissions and a larger universe of tradable products than their competition. It turned out that one unexpected autoliquidation kills years of commissions savings and by going with a couple different brokers I could replicate the products I wanted with less hassle than a single call to their "customer service" team, so you add that to all the minuses and I'd be crazy to stay with them.
Etrade. sign hard to borrow statement. off you go. i use them to short uvxy but small cap borrows are sometimes available
they told me they couldn't do these tickers, even after signing the hard to borrow agreement. i jumped through all of etrades hoops then was told it wouldn't work.
OP, How much does Suretrader charge for hard to borrow stocks? what broker are you using now? I've been using Tradezero for shorting overextended small-caps. To locate hard to borrow shares, they charge mostly between 0.05 and 0.09 /sh.