Anyone trade the ICE FANG contract today ?

[sle]

Guys, the interest cost is priced into the futures. It's priced into ALL futures. If a stock is hard to borrow, it will also be discounted through the futures.

Well, while that's true in theory, it's not exactly true in practice. Funding and borrow costs differ across the platforms, while if there is an exchange-traded product it's far more transparent. Also, futures provide long/short symmetry with regards to borrow and funding costs - right now, if you are long a HTB stock, you get no benefit while your broker is getting rich.

 

[Robert Morse]

Well, while that's true in theory, it's not exactly true in practice. Funding and borrow costs differ across the platforms, while if there is an exchange-traded product it's far more transparent. Also, futures provide long/short symmetry with regards to borrow and funding costs - right now, if you are long a HTB stock, you get no benefit while your broker is getting rich.

And shorting a future does not require a locate or have buy-ins.

 

[Maverick74]

Well, while that's true in theory, it's not exactly true in practice. Funding and borrow costs differ across the platforms, while if there is an exchange-traded product it's far more transparent. Also, futures provide long/short symmetry with regards to borrow and funding costs - right now, if you are long a HTB stock, you get no benefit while your broker is getting rich.

Doesn't IB brag that pay you those high borrow rates when a stock is hard to borrow so they can lend your shares?

 

[sle]

Doesn't IB brag that pay you those high borrow rates when a stock is hard to borrow so they can lend your shares?

I am not using IB, for obvious reasons. For brokers that do some pass-through, in most cases the “bid-ask” on these rates (borrow vs rebate) is like half of the carry. I am sure IB is not an exception.

 

[ajacobson]

A little over 400 first day.