I was charged a ridiculous overnight short fee

G

GotherL

I shorted ASLN at $5.50 and covered the next day at 2.70 for a $484 profit only to find out Tradezero charged me an overnight short fee of $564. This is absolutely ridiculous.

Their pricing rules looks like this.
Hard to Borrow Overnight Shorts 7x market rate cost for 1st night, additional days charged at 1x market rate

I don't even know what that means. Someone help me understand please...
 
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zdreg said:
where does the 7x market rate come from?
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From their website. At least they have always been honest about it. But is is not a healthy business model. Who in their right mind would continue to use them as a broker when they find out that they pay 7 times for day 1, if they missed the information on their website before opening an account.
 
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What I miss in general is a study comparing short borrow rates among brokers. I checked the Bloomberg terminal. It does not carry this data. Of course I could simply open accounts across the board. However, being situated in the EU prevents that.
 
Maverick2608 said:
From their webpage. At least they have always been honest about it. But is is not a healthy business model. Who in their right mind would continue to use them as a broker when they find out that they pay 7 times for day 1.
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Yeah it's extortion. Beware of this broker. If you shorted 10,000 shares and held it overnight you might end up with fees in the hundreds of thousands.
 
FSU said:
Was this over the weekend as well?
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In that case it would only be 7 times for the first day, I assume. That is 7 times for Friday overnight and 1 times regular rate for Saturday and Sunday overnights.

However, what is meant by "regular rate" is also a shaky concept, I guess, as I assume that is up to the broker to decide.
 
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