Hi there, I checked the SLB for some EU stocks and saw this: Fee Rate: 3,24% Rebate Rate: -5,95% How can it be that the Fee Rate is lower then the Rebate Rate? Thanks!
I can answer it by myself: It is because of the negativ interests in EUR. The rebate rate is always shown for top Tiers level, which is -2,8% for EUR. So the rebate rate is what you have to pay in total for shorting the stock if you are at top tier level.
...but only if you are at Top Tier level, otherwise you have to pay less. For example EUR Stocks you have to pay 2% less for shorting under 100k.
It is important for you to understand what the rebate rate actually is, any amount paid by a stock lender to a borrower who has put cash collateral to borrow a stock is termed as a rebate rate. But the main question arises that can a rebate be negative? It can be but only in situations where the interest rate in a respective dealing currency goes negative.
Rebate Rate = Fee Rate - interest you get This is what you have to pay for shorting Stocks. In case of negativ interests the rebate rate is: Fee Rate + interest you have to pay SLB in TWS always shows the Rebate Rate for Top Tier, so properly you have to adjust the interesr.