Are some brokers better then others for shorting ETF's? My broker seems to be unable to fill me. ETFs: TTP, OIH
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Can't get filled on Short side ETF
- Thread starter trader60611
- Start date
Natalie...
then why did my broker say this to me in an email?
<<Borrowing stock for short sales are on a" first come first server basis".
We have a limited number of shares in inventory, once that is depleted we
no longer have shares available.
If you have any further questions, please feel free to contact us.>>>
then why did my broker say this to me in an email?
<<Borrowing stock for short sales are on a" first come first server basis".
We have a limited number of shares in inventory, once that is depleted we
no longer have shares available.
If you have any further questions, please feel free to contact us.>>>
I'm not an expert on ETF's, but your broker's answer seems to indicate that they have a thin inventory of these shares, perhaps there are relatively few shares of those funds outstanding in general, or it happens that this particular broker's customers do not hold many of those shares.
Since selling short requires that your broker borrow shares from another customer, once they no longer have shares which have not been borrowed and sold short they cannot sell short any more (maybe a limitation on what portion of their inventory they are willing/allowed to sell short?).
Are these on your broker's Hard to Borrow list? Maybe talk with other brokerage firms to see whether these shares are commonly hard to borrow for any brokerage, or another broker would be in a better position to loan shares for shorting.
Since selling short requires that your broker borrow shares from another customer, once they no longer have shares which have not been borrowed and sold short they cannot sell short any more (maybe a limitation on what portion of their inventory they are willing/allowed to sell short?).
Are these on your broker's Hard to Borrow list? Maybe talk with other brokerage firms to see whether these shares are commonly hard to borrow for any brokerage, or another broker would be in a better position to loan shares for shorting.
This is actually a common occurrence in lower volume etf's. You may just have to find another strategy or backup solution to counter this problem if you really need to short these instruments.
Quote from Manny Mendelson:
Natalie...
then why did my broker say this to me in an email?
<<Borrowing stock for short sales are on a" first come first server basis".
We have a limited number of shares in inventory, once that is depleted we
no longer have shares available.
If you have any further questions, please feel free to contact us.>>>
Aha, that's not about getting a fill, that is about shares being available for you to borrow in order to sell them short.
Different instruments have different amounts of stock available. Some are in short supply (no pun intended) especially in an extended down move. If they have nothing left for you to borrow, then you can't sell what you don't have. If they have sufficient on their list for you to borrow and sell in the market (and thus give back to them at a later time/date) then you will be able to do it.
This can happen at any broker and especially with the smaller, less frequently traded, and less liquid stocks/ETF's
Very different from getting a fill...
Best
Natalie
<<This can happen at any broker and especially with the smaller, less frequently traded, and less liquid stocks/ETF's>>>
These ETFs do 100,000 shares or more /day. I re-post my original question: is there a broker who can get these trades done for me?
These ETFs do 100,000 shares or more /day. I re-post my original question: is there a broker who can get these trades done for me?
Quote from trader60611:
<<This can happen at any broker and especially with the smaller, less frequently traded, and less liquid stocks/ETF's>>>
These ETFs do 100,000 shares or more /day. I re-post my original question: is there a broker who can get these trades done for me?
Which is small volume. QQQ does more like 70m - 80m avarage as opposed to 100k...
TTP is on IB's list of borrowable stocks but not OIH. But that doesn't mean they have any available though, especially in things so illiquid with such small volume.
Beyond that don't know.
Best
Natalie
p.s. It would help eliminate 1 broker if you named the one you are currently using...