How often is your firm unable to borrow stock?

A

ArcticTrader

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Hey there... I trade prop through a firm that clears with Penson, and today they couldn't find any AAPL to short. The customer service rep says that this is not all that unusual, and does happen from time to time.

Are they correct in this statement, for a NASDAQ 100 stock like AAPL? Or should I expect my firm to always be able to borrow a stock that is this liquid? Was anyone else able to short APPL today? (Not that it was a good idea, mind you :-))

Thanks!
 
they are correct, not being able to short a stock happens all the time, many times while you trading you may be able to short the stock and minutes later the broker doesn't own any of the stock and is unable to allow short selling positions.
if you want to be guaranteed to short certain stocks you can pay for that right a few cents which allows you to trade both long and shorts..
the also occurs when the stock has large moves, it is close to options expiry (3rd Friday of every month).
You may find if you are needed the short position to complete your scale in of the trade and you find yourself unable to short...
you can obtain your necessary positon with options.
If I am scaling into a positon and need the addtional shares and I believe the stock is going short I will write a call on that stock, realizing if I am wrong I could be fed the stock any time from the time I write the call until expiry.

w
 
Thanks for the response - here's a follow up question:

When a stock is unshortable, does your broker set that at the beginning of the day and make it not subject to change (i.e. unshortable all day), or do they generally go on and off with this during the day? Mine sets it once at the beginning of the day and disallows shorting for the entire trading session - just curious if that is typical behavior...

Thanks!
 
I've been able to call up my broker and request shortable shares during the trading day. Sometimes I get them, sometimes I don't.

I've been doing a bit of reading into options to create synthetic short positions. The spread and comissions may work against day traders, but might work for swing traders.
 
Quote from ArcticTrader:

Thanks for the response - here's a follow up question:

When a stock is unshortable, does your broker set that at the beginning of the day and make it not subject to change (i.e. unshortable all day), or do they generally go on and off with this during the day? Mine sets it once at the beginning of the day and disallows shorting for the entire trading session - just curious if that is typical behavior...

Thanks!
More...

Any good clearing firm will call around the street...
And locate a stock for you...
Even if it's thinly traded and hard to find.

They will locate the stock for you at any time...
From the time they open to late afternoon.

Some firms will serve you...
Others don't care if you live or die...
And are doing you a big favor if they answer the phone to get rid of you.

I have a very hard time believing that AAPL would ever be unavailable.
I hedged convertibles versus the common for 2 years...
And cannot recall a single instance where any common (out of at least 50) was unavailable.
 
yeah most times it takes ages to locate tho...i tried to short pozn a hour after the bell couple of months ago and ib found some shares after the close...i was amazed to see the message then. same shit happened with another stock last week...tried to sell durin' session, no luck..located at close...fuck it; obvious u'll likely to find 'em then with all pos liquidated, and it's just no use, innit.
 
Quote from Bitstream:

yeah most times it takes ages to locate tho...i tried to short pozn a hour after the bell couple of months ago and ib found some shares after the close...i was amazed to see the message then. same shit happened with another stock last week...tried to sell durin' session, no luck..located at close...fuck it; obvious u'll likely to find 'em then with all pos liquidated, and it's just no use, innit.
More...

IMO, repeat IMO, the IB Stock Loan people are a bunch of amateurs...
Programmers masquarading as Stock Loan pros.
You cannot compare them to a professional Wall Street Stock Loan Department.

The main good thing about the IB stock list...
Is that I have coded a Web Spider that reads the list every 3 minutes...
And then automatically does a cross reference against the 400 stocks I'm tracking.

I now know that IB updates the list only 3-4 times/day...
(They can't be bothered to do it in real time)...
And they will not provide pro traders with any information about the list.
It's just a black box, baby.

** Their selection is good... about average **...
But you cannot get a locates... which is a service IB is withholding from pro traders...
And they will never penetrate the Clearing Business while withholding basic services.

And the "bulliten" that IB "located" stock at 15:00 that you needed at 9:00...
Is Keystone Kops comical... more annoying than useful.

But the genius who dreamed it up will fight to the death to promote it as "better than nothing"...
As opposed to giving pro traders enhancements they might actually find useful.
Is that IB's new slogan... "Better Than Nothing"?

Also... if they have 13 shares available for short...
The stock will stay on the Shortable List forever... which is crazy.
Anything < 100, or really < 200 shares... is not "shortable" under any circumstances...
And should NOT be on the list as "shortable".
 
I was getting a popup message on unshortable stocks, but lately , all that happens is the order is cancelled.

Anyone know what the problem is, and how to fix it?
 
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