re: most profitable way to go short https://www.cbs.com/shows/bull/video/0EBo4Z_w3LioZNtN_8VDDW_dQSefoBDz/bull-prior-bad-acts/
I made a mistake. The maximum decrease is seen only up to 0.5% and not 0.40 - 0.30 etc. You will see for example 1 0,08 0,06 0,5 and then they are removed from the list.
it sounds similar to the old misery index which equaled the inflation rate plus the unemployment rate, of course if you are right on the trade there is no misery.
Maybe there are more factors involved in short lend rates. One possibility is insiders with stock grants or slowly vesting option grants that short to hedge so lend rate is worth the cost. I think TRXC 40s percent rate (I receive 20s) is caused by shorting from employee grants hedging and warrants. Also convertible bonds may be a factor. Another possibility is option spread pricing. I think quite a few option spreads involve shorting stock legs. Have you looked at these extra factors?
On the stocks in question very low insider ownership, as in 5% or less. As normal nothing makes sense in Short Lend Interest Rate Twilight Zone. But thanks for idea. No one else has been able to answer the riddle. More data. Of the 20,000 or so USA stocks only two have very high lend interest rates, month after month with most of you stock getting lent. AIPT and RNKLF, and have reasonable or highly likely chance to proper respectively. That is 1/100th of one percent. So rare in those two cases the stock being over 100% shorted by naked shorts, thus they are unable to get out, is best I can come up with. But then all the other backwards stuff such as the most shorted stocks with 50% short have tiny 2% interest rates while barely shorted stocks can have 106% interest rates still remains.
darp - ever try talking to IB about the rates? Maybe some back office people can give you a more clear answer or let you know why its so messed up. I would love to hear why if you figure it out.
it only messed up in your mind and others who don't like the rates outcome. rates are determined by supply and demand at a given moment in time.
Hi, Think if you look at the data you will change your mind, the heavily shorted stocks have low interest rates and the stocks NASDAQ claims have low short positions have high interest rates. That is what this thread is about, it is backwards of supply and demand. And that can go on for years on same stock like AIPT, not minutes. For last year have been getting rather huge interest payments on AIPT, about 100% annualized.
Strange. My discount broker never asked me to lend them my holding except once: Early last year for some reasons they called and asked me to lend one of my small cap stocks and paid ~100% interest rate. Of course they only borrowed for a week. Should add it was a stock with only 10 million shares outstanding, very little insider ownership, high institution ownership and a short of ~15% according to Yahoo Finance. I should find out what is their practice.