not quite so clear. the question is has the algorithm changed in determining who gets hard to borrow stock, what about as previously mentioned additional costs for hard to borrow stock. having to pay additional costs for hard to borrow stocks is a good thing because nearly all retail firms do not allow customers to short stocks where there are additional costs to borrow. IB simply passed on these costs to the client. I hope we don't lose this feature.
I agree that it would be nice to know this stuff in advance before IB changes it. This can be very annoying indeed! Not sure about hard to borrow stock charges. Just like that fact that you don't have to keep resubmitting an order to check whether it has become available to borrow.
sam - this was true in some, but not all, cases. some times, i would have a flashing alert saying "you requested to borrow stock ZZZ we located shares and it is available at YYY interest rate". i just like having my TWS have as little unnecessary stuff open on it; now, i have to move all the orders off the page, so i can view things comfortably. but just one person's opinion...
If the rate varies from our standard rates, customers will receive a pop up. If the customer approves the rate, the short sale will be submitted. In the past our SLB desk would attempt to locate shares for certain rejected short sales but had no indication if the customer still wanted to execute the trade at the time the product was located. In the new system we'll know the customers intent, and we'll contuine to search.
How does this affect short orders submitted through the API? Before, an error message would be sent back.
I'm testing with my API now. I'll let you know how you can distinguish between a working order (stock available) and pending order (IB looking for shares).
Short sales were shares are not immediately available will remain in a PreSubmitted state. The state is included in the API acknowledgement.
This is only useful when market is open. When the market is closed all shorts remain in presubmitted state. Using the api, I used to recognize the "insufficient shares" message and progressively enter smaller orders until I reached the number available. Now, as far as I can tell, the api does not provide any method of doing this. In fact the api cannot even tell when there is a borrow problem since the status returned is the same for both unable to borrow and for the able to borrow orders when the market is not open. I sometimes enter 100 orders the night before. I don't want to handle them manually and I want to cancel them if completely unable to borrow. If unable to borrow from IB I try another broker. How do I use the api to recognize the unable to borrow when the market is not open?
And more importantly, how do we know that the order is not just in preSubmitted state, just taking its sweet old time? What is the cutoff point at which you can say "This order is not going active because there are no shares to borrow?" If IB had publically announced this changed before it happened, I'm sure its users would have foreseen these types of problems *before* the activation of this new feature. It would save time and frustration for IB and its customers if a better way of communicating these changes could be implemented - in this case there are unintended consequences that make shorting through the API more aggravating than it needs to be.
I first noticed it when I questioned a missing fill on a short I thought was working. Apparently the out-of-date TWS I was using thought the order was submitted. It showed a green status and my monitoring program showed the status as submitted. I went ballistic when the IB rep told me that was the way it worked (after taking an hour to figure out what was happening), including that the status would show as submitted even though the order was not working. I only learned of the importance of upgrading later. It was poor form not to notify customers ahead of time before making such an important and poorly considered change.