Question about shortablestocks.com

I'm interested in opening an account with Centerpoint Securities to short stocks. I've heard it does a much better job of locating HTB stocks than the big brokers. I want to know how much better of a job it does than others - does anyone know what source shortablestocks.com gets their short availability from? Are they getting this from a big broker? If so then I could look forward to better availability than what it shows right?

 

is center point security reliable?

 

There is a site called iborrowdesk.com (it uses IB's database) and the site you mentioned also showed the same amount when I checked a few stocks, so I'd say it uses IB.

As far as I know, brokers like tradezero and centerpoint are specialized in short selling and have locates available most of the time.

I have an account with tradezero, haven't shorted anything yet but I've used its locate tool, almost everything is shortable.

 

How can Centerpoint find locates if the big brokers don't show any availability?

 

Centerpoint might let you short longs held by other customers.

 

Clear Street / Centerpoint has a market neutral desk that does things like long stock / short ITM option in order to create borrow for its customers.

 

??? how does that work?

someone has to give centerpoint the shares to lend.

 

E.g., desk buys shares and sells 90 delta calls. Those shares can be lent to you or used to preserve borrow. Not a game I play so didn't get into details but this was what a Clear Street rep implied. Might also achieve this by showing flow to someone who does similar and gives them the borrow.

 

I have a machine learning algorithm that shorts stocks only. IBKR was unable to find all the shorts I need but they have great automation capabilities through API and complex order algos. However they have very poor locate ability. I am testing Centerpoint now and they have almost all the locates but their commissions are too high. On the average my list costs almost 4%+ (2%+ to initiate the locate and another 2%+ to keep the short for a week) to short for about a week. This takes away most of my profits. Does anyone have any suggestions?

 

No free lunch. The cost is why the borrow is available. Expressing through options is sometimes a less expensive way to put the trade on than shorting directly. If you're >5m equity talk to Clear Street directly and you might be able to get a better deal.