Can anyone tell me which direct access broker has the best (both depth and breadth) short sale inventory. In my limited experience I have found IB to be rather lacking and was wondering if you might know of any comparable broker with a better short sale inventory. Thanks, williamss
Williams: I can't answer your question, but I can tell you to steer clear of Trade Station with regard to short sale inventory. From my reading in the TS user forum, as well as my direct experience, I'd estimate that 40% of stocks are unavailable for shorting through TS, in association with Bear Stearns, which is absolutely ridiculous and unnecessary. I'm sorry to hear IB is lacking, as I had considered going with them precisely b/c of TS's limited short sale inventory. Would really like to find out which DABs are best for shorting selection - John
What issues are you trying to short? Some 'ma and 'pa business? Maybe if you put out some names people can tell you if their broker has it on their shortable list.
Mazotrade, I have a TradeStation account and have never had any issues with the short sale inventory. I have radarscreen track over 700 symbols that I scan daily which include NYSE, Nasdaq, and AMEX stocks of all volume levels. Out of all those there are only 12 listed as Hard-to-Borrow which simply means that you can't short them online but must call the order desk. So I'd say the inventory is very good. I have many many problems with TradeStation but the short sale inventory is not one of them.
Last I checked (about a week ago) IB had 1,848 of the top 2,016 equities available to short (91.6 %). My list of equities includes all equities and ETF's that have corresponding equity options. In my opinion that is pretty good.
I too have TS and have never had issues with short sale inventory -- but they are going self-clearing soon and this could really screw things up with regard to the depth of inventory...
Chad, Hmmm, I find your contention inconsistent with my research and experience. But rather than spread rumors, later this evening when I get home, I'll post some hard data to support my claim, or retract my statement. Stay tuned. Mskl, that's precisely the kind of data that's needed to address this question. We should accept no less in this forum. Good to know IB has a large inventory of shortable stocks. FYI, I was told by a rep at Terra Nova that they offer shorts on any stock over $5, but it may be necessary to call the desk in some cases.
Some of the stocks that I'm trying to short are rather smaller issues. The one that I can think of most recently was ELANZ. I know that someone has the ability to short it since it's not one the Nasdaq's restricted security list but I'm not sure who. williamss
"Last I checked (about a week ago) IB had 1,848 of the top 2,016 equities available to short (91.6 %)." Those numbers do NOT mean anything - they represent theoretical availability. It's a different story when the stock is pumped - you want to short it - and it's not available on that day. Timing is everything: I short a lot and I would say that at least 30-35% of the stocks (probably more) that I would like to short is not available with IB - ON THAT DAY (just when you need them). Yes, they may be available the following day - when nobody wants them.