Discussion in 'Order Execution' started by JohnTack, Feb 22, 2007.
Is this just a list of stock available to short, or it is something more complicated?
Yup, that's about as complicated as it is.
The "published" short(able) list is primarily the list of stocks held by brokers, that they "loan" you when you short (and then they keep your short stock interest and charge you for it.
Whenever we find a "hard to borrow" security, we just call Goldman Sachs and they authorize the trade and give us a code to use. Then we can short the "hard to borrow" stocks...pretty big edge, especially with all the pairs trading going on.
Very few clearing firms have the same ability as Goldman, since they have such a big "dark pool" of liquidity.
don - are you able to do that with reg SHO stocks as well? and do you allow (or discourage, i mean) your traders from jumping in the high % shorts such as OSTK or some of the stocks which have >40% short interest?
SHO, no problem...wouldn't consider trading OSTK in any event (Just don't see any possible edge with good ol' overstock).
thanks for the reply, don....
yeah, i wasn't meaning overstock specifically (because the stock's action has been positive), just that was the first one which popped in my head as a stock which has been shorted to the hills for a real long time...
Good, you had me worried about you, LOL.
1. Is there an electronic way for you to put the request to Goldman for a hard-to-borrow stock or is the phone the only option? eg something on the platform or can they process it by email for example?
2. How often is Goldman able to find a hard-to-borrow stock for you on average?
We can use electronic access, and if it's not there, we can call Goldman and get a code to use. I've never been "turned down" on any short (but I'm sure there are some stocks they can't short, but I probably wouldn't want those anyway). This is almost a "must" for pairs traders, of course.
This is my first post. Just found this site. I like it. I invest in a few stocks, and I always read about stocks (OTC:BB) that are being naked shorted by the market makers. Is there anyway that you are aware of that can prove, 100% that a stock is being grossly naked shorted? I mean in the tens of millions. I read about this all the time, but I have yet to find anyone who could prove this was happening. Not saying it doesn't happen, I just haven't been able to find any proof. Thanks in advance for your answer, or to anyone who can answer it..
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