Costs for short selling

[Sam Mcgee]

Does anyone know for example how much it might cost me to short sell 1000 shares of SQQQ with Interactive brokers for a period of one month? I understand that I would pay commission to short and to cover the trade. I believe that I would also incur an interest charge. IB shows a current fee rate as such:

.....but it doesn't specify if that's a monthy or yearly interest rate or something else.

I have a trading system figured out that might make over 20% a year by shorting the SQQQ but if I have to pay something like 1% a month interest, there's no point in running it.

 

[S2007S]

1% interest???

Thats absolutely nothing compared to other borrowing rates!

 

[hafez50]

Does anyone know for example how much it might cost me to short sell 1000 shares of SQQQ with Interactive brokers for a period of one month? I understand that I would pay commission to short and to cover the trade. I believe that I would also incur an interest charge. IB shows a current fee rate as such:View attachment 227133
View attachment 227134
.....but it doesn't specify if that's a monthy or yearly interest rate or something else.

I have a trading system figured out that might make over 20% a year by shorting the SQQQ but if I have to pay something like 1% a month interest, there's no point in running it.

I don't know the answer but it has to be substantial as every single trader in the world knows sqqq or most especially bear etf's will erode 50% a yr min . When something's known on wall street "it's priced in" before you can blink

 

[Girija]

Does anyone know for example how much it might cost me to short sell 1000 shares of SQQQ with Interactive brokers for a period of one month? I understand that I would pay commission to short and to cover the trade. I believe that I would also incur an interest charge. IB shows a current fee rate as such:View attachment 227133
View attachment 227134
.....but it doesn't specify if that's a monthy or yearly interest rate or something else.

I have a trading system figured out that might make over 20% a year by shorting the SQQQ but if I have to pay something like 1% a month interest, there's no point in running it.

When you have decided to short the inverse why you wouldn't go long on the related opposite. In this case TQQQ. I am not sure but most brokers don't allow it due to the drawdown for retail investors.

 

[eastern_warrior]

Does anyone know for example how much it might cost me to short sell 1000 shares of SQQQ with Interactive brokers for a period of one month? I understand that I would pay commission to short and to cover the trade. I believe that I would also incur an interest charge. IB shows a current fee rate as such:View attachment 227133
View attachment 227134
.....but it doesn't specify if that's a monthy or yearly interest rate or something else.

I have a trading system figured out that might make over 20% a year by shorting the SQQQ but if I have to pay something like 1% a month interest, there's no point in running it.

Like most questions, search and you may find. IB has specific examples with calculations on their site. The rate is annual.

https://www.interactivebrokers.com/en/index.php?f=46377&p=i

and also an

FAQ: What does it mean by fee rate and rebate rate?

FAQ Home / Commissions, Fees & Interest / Interest

The Fee Rate represents the rate (generally expressed as an interest rate) that the lender assesses to the borrower of the shares. The lender will then reinvest the cash collateral posted by the borrower to secure return of the shares and may offer a partial rebate of those earnings back to borrower's broker (generally equal to the Fed Funds Rate in the case of USD stock loans). Many brokers do not pass any part of this rebate to retail accounts although IBKR does and the Rebate Rate reflects the net of the Fee Rate and any rebate offered.

For example, assume stock ABC is hard-to-borrow and carries a Fee Rate of 20%. If the Fed Funds Rate and rebate provided is 2% then the Rebate rate is -18% (note that a negative Rebate Rate reflects a net charge to the borrower).