Which brokers pay interest on proceeds of shorted stocks?

Discussion in 'Retail Brokers' started by Maverick2608, Feb 8, 2018.

  1. mskl



    There is almost NO market in many of the hard to borrow names (ie RIOT, OSTK) that you have listed. No market in the futures and no market in the spread market (STARS).

    I have owned many hard to borrow names and I can get the "lending fee" easier and get a better price by buying the equity option "synthetic" at a discount. The option markets are much better than what you guys post. Also, IB's 50% is also much better although this is a "daily" rate so it is harder to compare vs locking in a rate over a term

    For the record, I would rather use SSF's (vs Options) as there is no assignment risk but there just isn't a good market in many names.
    #11     Feb 8, 2018
  2. elt894


    I've occasionally used SSFs for hard to borrow names,
    Seconded. I occasionally use SSFs for HTB names and would love if more had a liquid market, but I often find synthetic options at a better price. I've also had cases where the market maker stops quoting entirely shortly after I make a trade, leaving me with no choice but to hold to maturity (which I fortunately I intended to do anyway).
    #12     Feb 8, 2018
  3. No taxpayer would transfer an appreciated asset and replace using options or combinations of options as that would trigger a tax event. Using STARS they could preserve the basis upon the return of the securities and capture the HTB rate without being exposed to exercise/assignment, pin risk or capital distribution risks such as dividends.
    Your access to the options markets is much than the choices to get to OneChicago but I have explained the reasons for that. The product competes with how brokers make money off their customers like you.

    It is certainly true that marketmakers do not quote most of these markets but there are some. From today's activity: JCP/-50.33%; TTWO/-39%; EPE/-25%;IRBT/-9.35%; TWTR/09.26%;BCS/-4.85%; FB/-1.97%

    Despite the work necessary it may be worth your investment in time to get the better deal...which isn't always at OneChicago.
    #13     Feb 8, 2018
  4. elt894


    Are you able to consistently get your shares lent out with IB? My experience has been stuff with really high rates (100%+) are almost always lent, but stocks with 10-20% rates are basically never.
    #14     Feb 8, 2018
  5. mskl


    similar experience. hit or miss. No real pattern but you can't expect that you will be able to lend your shares through IB.
    #15     Feb 9, 2018