Why are some stocks not shortable?

Discussion in 'Order Execution' started by cunparis, Jun 24, 2008.

  1. I've noticed that some stocks which show up on my scans aren't shortable. I'm curious what the reasons are for this. I've heard that IB allows you to short almost any stock, but I always find a lot that aren't shortable.

    I also check with MB Trading & Fidelity, they won't let me short them either. So I'm thinking it's not something specific to IB but something more general.

    Any ideas?
  2. Daal


    in my experience IB has more stocks to short than MB
  3. usually it is as simple as there are no available shares - especially in heavily shorted issues. Got a for instance?
  4. Your clearing firm has to have shares to cover you and often times, they cannot obtain them. There is a whole secondary market between bank back offices that deals with lending out shares. Some stocks either aren't liquid enough or are hoarded by various clearing firms. If you're clearing firm does not have access to the shares, they will not allow you to short the stock.
  5. nassau


    If you are concerned about trading a short position and shares not being available you can always contact your broker and pay a small fee for the shares to be available.

  6. For my scan for today there is ROYL.
  7. TOS says ROYL is "easy to borrow" , and they use penson, same as MB.
  8. Too bad for Royal, went down big time.

    I kept my eye on both IB & MB and neither would let me short it. :(
  9. zdreg


    not true. only a firm firms have the accounting systems set up to handle this situation.
  10. Got an interesting message from IB today:

    I didn't take them up on it, it was way too late and the almost 2% premium is too much. but it was nice of them to offer.
    #10     Jun 26, 2008