Can't get shorts filled?????

M

Market-do

I'm with TradeStation. For about 3 weeks I get a message saying that shares of Spy are hard to locate and my order is rejected. Yesterday I tried to short SPY, DIA, and IWM early in the morning and got the same message. With orders of only 100 shares I get rejected. What gives? Is everyone really leaning the same way or does TradeStation have a very small supply or is something else going on? I haven't contact them yet, I wanted to be fully prepared to discuss the issue. Thanks
 
The ETFs have been routinely been on the Reg. SHO "threshold list" (SPY as recently as 4 days ago) for failure to deliver. This keeps them from being shorted unless a firm has made special arrangements to allow it.

I've never been able to get a reasonable explanation of why these huge, liquid stocks have this problem. Sure would be nice to find out - I'll bet it reveals something interesting.
 
Quote from alanm:

The ETFs have been routinely been on the Reg. SHO "threshold list" (SPY as recently as 4 days ago) for failure to deliver. This keeps them from being shorted unless a firm has made special arrangements to allow it.

I've never been able to get a reasonable explanation of why these huge, liquid stocks have this problem. Sure would be nice to find out - I'll bet it reveals something interesting.
More...

That IS interesting that those ETFs are on the threshold list. But firms can def short the security if they have it to loan...which looks to be the problem with tradestation currently. Normally, we just have a list of "easy to borrow" securities and short based on this. You can't use this list once the stock is on the threshold list. It has to physically be at the B/D or arranged for borrowing from another firm BEFORE the short order is accepted. That's odd that TradeStation doesn't have any shares to loan.

Maybe they're one of the B/D's that put the ETF's on the threshold list in the first place by failing to deliver. LOL

Hope this helps with your conversation with them.

Specifically, under Rule 203(b)(3)(iii), any such participant and any broker-dealer for which it clears (including any market maker) is prohibited from effecting further short sales in the particular threshold security without first borrowing or arranging to borrow the security (as opposed to only obtaining a “locate”).
 
Quote from Steve_IB:

You should always be able to short the major ETF's with IB.
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Not today...IB rejected my order. :(
I tried to go short the SPY this afternoon and my order was rejected.

"Your order is not accepted. We currently have 0 shares of SPY available for short sale."

Do you have any idea why this happened today?
 
Quote from Sophomore:

Maybe it's "government intervention" and telling the banks and such not to allow shorts so the market doesn't tank?
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Probably some truth to that statement. =)
 
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