RE: Stock on loan / shorts + Stock %10 Feb 2022 10:20
Tigra & all
Cost to borrow on stock - the higher number the bigger risk & hard to borrow -
( certainly not into shorting whatsoever just look for high numbers to avoid stocks / red flag if u like - & or gauge direction )
A stock loan fee, or borrow fee, is a fee charged by a brokerage firm to a client for borrowing shares. A stock loan fee is charged pursuant to a Securities Lending Agreement (SLA) that must be completed before the stock is borrowed by a client (whether a hedge fund or retail investor).
Here’s some previous hornswaggle i posted taken from a source
Costs of Short Selling
Unlike buying and holding stocks or investments, short selling involves significant costs, in addition to the usual trading commissions that have to be paid to brokers. Some of the costs include:
Margin Interest
Margin interest can be a significant expense when trading stocks on margin. Since short sales can only be made via margin accounts, the interest payable on short trades can add up over time, especially if short positions are kept open over an extended period.
Stock Borrowing Costs
Shares that are difficult to borrow—because of high short interest, limited float, or any other reason—have “hard-to-borrow” fees that can be quite substantial. The fee is based on an annualized rate that can range from a small fraction of a percent to more than 100% of the value of the short trade and is pro-rated for the number of days that the short trade is open.
As the hard-to-borrow rate can fluctuate substantially from day to day and even on an intra-day basis, the exact dollar amount of the fee may not be known in advance. The fee is usually assessed by the broker-dealer to the client’s account either at month-end or upon closing of the short trade, and if it is quite large, can make a big dent in the profitability of a short trade or exacerbate losses on it.
Rums & nipping sphincters all round
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