Paying to Locate Stock

Discussion in 'Professional Trading' started by vonvon, Feb 4, 2008.

  1. vonvon


    So we have been using over here at Assent for a few months and recently we've been getting pissy about the cost that these Locates are taking from our bottom line. Obviously the demand for the ABK's and MBI's are high, but these stocks are now restricted every day and are costing 4 cents a share for intraday borrowing. I'm curious as to whether everyone else out there is finding these stocks restricted to short everyday and also are you paying these same prices for daily locates? Thanks
  2. There have been months that I paid more than 10K to locatestock.. It is the rule of the game unfortunately..
    I am sure there are entities that you can get these stocks cheaper but what can you do...
  3. I mean, why don't you guys all get together and negotiate a commission free deal somewhere while you're at it.

  4. ya gotta love paying money to naked short stock


    I am NOT recruiting business, I do not recommend any one firm, etc. but have you looked at Penson's short list?

    When I paid a grand in locates at the end of the month, it made me sick to my stomach.
  5. if you go to a decent prime broker, many introduce GSCO, or penson, but perhaps they charge these fees to you from the introducing. Anyway, I use UBS now and before I used GSCO (the old SLK). Both of these brokers actually pay me roughly the fed funds rate when I borrow stocks in the US. They pay me. In Europe it is based off LIBOR. Anyhow, if the fed is 3% then maybe they pay me 2.85% for shorting a stock (when you short you give them the money and borrow the stock). They lend out the stock for free as a service. They may charge me only if it is hard to borrow, but if they charge less than 2.85% I am still making money for shorting. I make lots of bps of interest each month from this since we are long/short. I am guessing that your introducing or retail broker are shafting you when they are actually getting paid for this. If you can get an account opened at GSCO or someone who introduces them you should be able to solve this problem.