The increasing costs of locating stock?

Discussion in 'Trading' started by vonvon, Feb 5, 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. I've noticed a HUGE increase in the number of hard to borrow stocks in the last few weeks. I have been able to get locates on several of them, but we don't get dinged for it. There may be an interest rate associated with holding them overnight though.
  3. Schonfeld, and now GENESIS, are pulling the fucking locate stock scam too. It fucking sucks. Such a ripoff.
  4. Yeah. While the intra-day locates are 95% of my locates, the bite on overnights is particularly harsh. Cut some costs when bullets left, and then again when the short-exempt went market-wide (x-essex), but now adding cost back with all these locates lately.
  5. Go trade Euronext... no stock locate bs...
  6. vonvon



    So at your firm you aren't paying for any intraday borrows? Or do the stocks you are borrowing just happen to be free?
  7. No charge for located stock. Certain stocks are borrowable, but earn very little short credit for overnights.
  8. What are you trading there? 'Seems every time I look at other exchanges, I end up getting dissapointed as well.

    Often, commish is higher, spreads wider, volume lower, etc.

    What's good at Euronext?

  9. vonvon



    Sorry to rehash this, but if you wanted to borrow 5000 MBI, you borrow it for free or does your firm pick up the cost? And also, what site are you borrowing the stock from?
  10. Maybe I'm wrong but I'm pretty sure when you pay to borrow stock your firm is pocketing the money. I don't think any firms pickup costs of borrowing when a trader gets a loan; they're just pocketing your money. There may be a third-party organization who keeps a percentage of the profit from the stock loan but it's all a racket.

    If you are going to cover EOD you should be able to naked short.
    #10     Feb 6, 2008