What is the IB fee to short the '19 stocks'?

Discussion in 'Retail Brokers' started by Daal, Jul 28, 2008.

  1. Daal

    Daal

    I received I message due being short FNM and FRE and it says they might charge a rate for that, does anyone know how much is the fee?
     
  2. God gave you two arms, so losing one isn't so bad.
     
  3. AAA30

    AAA30

    Highest cost to borrow that I have seen was around 17% on shld but for these stocks it could be much higher or much lower depending on demand from the shorts. There are alot of bag holder "value type" funds in these stocks who instead of admiting they have been wrong would rather lend them out.
     
  4. Daal

    Daal

    FNM and FRE are light green on TWS(on the shortable collumn) so I'm assuming that fee wont be that high
     
  5. If you goto your account management console in IB, and then hit the little icon that looks like a post box ('TOOLS') at the top, it offers a tool called Short Stock (SLB) Availability.

    Some examples:

    Symbol @ Exchange GOOG @ NASDAQ
    ISIN Code US38259P5089
    CUSIP 38259P508
    Country United States
    Quantity
    Available >10'000'000 shares
    Current
    Indicative Rate 2.12

    Symbol @ Exchange C @ NYSE
    ISIN Code US1729671016
    CUSIP 172967101
    Country United States
    Quantity
    Available 0 shares
    Current
    Indicative Rate 2.00

    Symbol @ Exchange MER @ NYSE
    ISIN Code US5901881087
    CUSIP 590188108
    Country United States
    Quantity
    Available 0 shares
    Current
    Indicative Rate 1.12

    Symbol @ Exchange F @ NYSE
    ISIN Code US3453708600
    CUSIP 345370860
    Country United States
    Quantity
    Available 4'500'000 shares
    Current
    Indicative Rate -0.12

    Symbol @ Exchange FRE @ NYSE
    ISIN Code US3134003017
    CUSIP 313400301
    Country United States
    Quantity
    Available 0 shares
    Current
    Indicative Rate -6.25

    Symbol @ Exchange TRI @ NYSE
    ISIN Code CA8849031056
    CUSIP 884903105
    Country United States
    Quantity
    Available 0 shares
    Current
    Indicative Rate -10.62



    From what I understand the 'indicative rate' is the interest that is charged (negative) or accrued (positive) for borrowing the stock on an annualized basis. It looks like SSF are serious altenatives for shorting certain hard to borrow symbols even though the spreads make you feel dealing with a one armed bandit.
     
  6. Daal

    Daal

    SSF tend to trade at a discount when shares are scarce. at one point MBI SSF for many months in the future was trading at like 80c discounts and you pay the bid ask spread on top of it. synthetic shorts with options is also problematic because the puts tend to be more expensive than the calls at least thats what I'm seeing
     
  7. JamesJ

    JamesJ

    recently tried to short CROX, was first not working then this message:
    _________
    You recently attempted to enter one or more short sale orders in securities which were not available for shorting at that time. We have located shares on your behalf so you may be able to enter short sale orders for these titles within the next minute(s).



    Stock

    Symbol

    Exchange

    CostToBorrow


    CROCS INC

    CROX

    NASDAQ

    32.06%


    The rates shown are the indicative additional costs to borrow these securities above the normal borrow rates. The effective cost to borrow will be determined at the time the borrow is actually established.
    Please note that the above stocks are generally deemed hard to borrow and may not be shortable again in the future. Additionally, certain borrowed positions have a higher likelihood of being recalled by the lender. In the event of a recall you may be required to repurchase positions on short notice or, if the lender initiates the repurchase, IB may pass on the transaction costs to you.
    _________

    32.06% is expensive
     
  8. Daal

    Daal

    as I understand IB rules they charge that rate off the interest that you would have been paid on the short sale proceeds. but since they dont pay interest on SS proceeds of the first $100K how does that math works for the smaller traders?So far my accrued interest is not reflecting any kind of negative rate