well at least you can rest easy knowing that most prop firms banks and large traders dont even have to locate! they just short like trading futures without any fees and they are flat by the end of the day so they get a pass. Not sure why anyone would pay any fee period to short. retail needs to of course but professionals dont and there is no such thing at a real stock prop desk of hard to borrow etc.
I was charged a ridiculous overnight short fee
- Thread starter GotherL
- Start date
All I can say is you just got JACKED by you broker.
All traders prop & retail have to have a locate made for shorts - SEC regulation SHO/203b.
If you have PM with IB you can do a per-borrow which is locating & reserving in advance shares you want to short.
Rule 203(b)(1) and (2) – Locate Requirement. Regulation SHO requires a broker-dealer to have reasonable grounds to believe that the security can be borrowed so that it can be delivered on the date delivery is due before effecting a short sale order in any equity security.[7] This
“locate” must be made and documented prior to effecting the short sale.
https://www.sec.gov/investor/pubs/regsho.htm
If you have PM with IB you can do a per-borrow which is locating & reserving in advance shares you want to short.
Rule 203(b)(1) and (2) – Locate Requirement. Regulation SHO requires a broker-dealer to have reasonable grounds to believe that the security can be borrowed so that it can be delivered on the date delivery is due before effecting a short sale order in any equity security.[7] This
“locate” must be made and documented prior to effecting the short sale.
https://www.sec.gov/investor/pubs/regsho.htm
rules get broken everyday all the time. yeah wtf do i know i only traded prop and dealt with big banks for years. its not enforced! just because you drive 100 mph in a school zone doesnt guarantee you get a ticket if no cop. how many idiots does it take to understand the free mkt is just that full of all kinds of rule breaking bending and outright lawlessness. the big ones dont ever worry about it..its nothing.
here is 1 instance of naked short selling and there are many many more. if you google naked short selling you will see the term ordinarily. exchanges are legal entities and with all law its gray and open for interoretation.
https://www.google.com/amp/s/www.fo...short-selling-helped-support-ubers-flail.aspx
https://www.google.com/amp/s/www.fo...short-selling-helped-support-ubers-flail.aspx
your welcome.. obvious here very few have a grip on what the market is or how it operates. they know all your orders and positions did u know that? stops too!! even in futures at your beloved cme!!
Naked shorting is the illegal practice of short selling shares that have not been affirmatively determined to exist. Ordinarily, traders must borrow a stock, or determine that it can be borrowed, before they sell it short. Due to various loopholes in the rules, and discrepancies between paper and electronic trading systems, naked shorting continues to happen.
Naked shorting is the illegal practice of short selling shares that have not been affirmatively determined to exist. Ordinarily, traders must borrow a stock, or determine that it can be borrowed, before they sell it short. Due to various loopholes in the rules, and discrepancies between paper and electronic trading systems, naked shorting continues to happen.
brokerages charge you for shares that dont exist!! and then on top of that they say there arent anymore to borrow to charge you even more when they locate!! lmfao.
No, the reason this fee seems outrageous is because the original poster paid 5.6% x 7 = 39% to short overnight.
As previously noted Tradezero clearly state on their website that they charge "7x market rate cost for 1st night."
https://www.tradezero.co/pricing
What I do not understand is why Tradezero believe that is a good business decision? Anyone doing simple research before opening an account - that is anyone with the potential to do real business - will stop and take their trading somewhere else when they see it on Tradezero's webpage like I did.
People who do open an account like the original poster will eventually find out this 7 x overnight charge like the original poster just did when they are charged the fee. When they do, they will stop making short trades and take their business somewhere else.
It's simply really bad business.
Tradezero may not be looking for customer who do real business.
With zero commissions now the standard, I think you will see brokers starting to change their fee structure to incentivize certain trading styles that they can optimize their operations around.