WSBers playing with fire and getting burned: NKLA hard to borrow early assignments on call spreads

Discussion in 'Options' started by blazespinnaker, Jun 23, 2020.

  1. tonyf

    tonyf

    It is with IB but no info on fees...
     
    #51     Jun 27, 2020
  2. Sorry, but I do not. I'm not that familiar with warrants, but regardless, I'd just pop on to their online chat with the trading desk as that's probably the most reliable info out there. You're probably in for a bit of a wait as they seem to have pretty big lines in the online chat these days.
     
    #52     Jun 27, 2020
  3. tonyf

    tonyf

    Tried that. Guy said 0 fees for warrants. I could not believe it. No online documentation to support his claim.
     
    #53     Jun 28, 2020
  4. ironchef

    ironchef

    52 contracts on a $5K account? o_O
     
    #54     Jun 28, 2020
  5. ironchef

    ironchef

    No. But if I own the shares and they are collecting dust, why don't I? I can terminate the loan at will any time. I have done that numerous times. Like free money, better than selling covered calls.
     
    #55     Jun 28, 2020
  6. Arnie

    Arnie

    When you open an account you agree to broker lending your shares out.

    upload_2020-6-28_10-42-48.png
     
    #56     Jun 28, 2020
  7. To be fair, yes! We enter this game know option traders loss over 98 percent of the time.
    For those who don't want shares loaned can you still use gtc orders to avoid loaning? I always use them on stocks low float movers. I put in a GTC sell order on 10,000 CB?? biotech I bought Friday $2.6-$3.1 using OutRTH at $4.40-$4.50. It did get filled, did my action prevent loans while in the $3s? Lots of educated players on this thread, thought you all might know.
     
    #57     Jun 28, 2020
  8. ironchef

    ironchef

    Assuming they did what you said and then you found out if they didn't do that, you would have printed money. You sue the hell out of them then.

    As a society, we like to sue whenever we lose, no matter the reasons and no matter who is responsible.
     
    #58     Jun 28, 2020
  9. ironchef

    ironchef

    Here is how one brokerage does it:

    You don't have to do that. When they first want to borrow you shares, they either call or send you an email asking you. If you say no, they won't borrow. If you say yes, they then open a separate account, put those shares in it and sufficient funds in it to cover the short. You can terminate or sell those share any time. I currently have shares that the broker borrowed and the interest rate for borrowing this particular stock is 22%.
     
    #59     Jun 28, 2020
    JesseJamesFinn1 likes this.
  10. FSU

    FSU

    Yep, their risk program would look at selling 100 $5 call spread for 4.95 as $500 in risk. Five thousand? You have plenty of money! Feel free to keep selling it!
     
    #60     Jun 28, 2020
    ironchef likes this.