When a client sells a stock short, shares must be located and borrowed so they can be delivered at settlement. Whether there is a cost to borrow the shares depends on market supply and demand. Stocks that are harder to borrow generally have higher borrow costs. Clients can use the following tools in TWS to estimate the borrow cost before placing a short sale order: - Shortable column: this column shows whether shares may be available to short, the estimated number of shares available and the projected borrow rate for the stock being monitored. - SLB Rates tool: this tool allows clients to search for stock loan borrow rates and review recent historical rate information. It can be opened from the Analytical Tools menu in TWS. - Borrow rates and short availability are indicative and can change during the day based on market conditions, supply and demand. The actual borrow cost is determined after the borrow has been sourced and may differ from the rate shown before the order is submitted. A stock being shown as shortable does not guarantee that shares will remain available at settlement. If shares cannot be borrowed or maintained, the short position may be subject to a forced close-out.
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