IB available shorts

R

roger2

I have recently (about a month ago) moved to IB from Datek. I found out what many of you already know...IB is reliable, professional, fast...and the commissions are unbeatable. I like their "Best_ECN" routing.

I am also impressed that IB has a representative who monitors this site -interacting with those who post here and considering their suggestions for improvements.

With that said, there is one area where I believe IB could use some improvement: available short list for Nasdaq stocks.

Here are some examples:

1)last week 3 biotechs had significant one-day gains on news. But VLGC, BPRX, and IGEN were not available to short

2)about 3 weeks ago I compiled a list of 14 semiconductor stocks to watch- 8 of which were not available to short (MTSN, PXLW, NANO, LTXX, GNSS, OCPI, DPMI, ATYT)

3)in the e-games software group TTWO, THQI, and AKLM can't be shorted

I could go on. Not everyone plays the same way. One of my favorites is to short the over-reaction to good news and/or analyst hype. But whenever I find a good candidate it seems that there is a much greater than 50% chance that IB does not have it available to short.

I must also say that IB has provided a simple tool which makes it very easy to check their short list. But I spend too much time using that tool, often to find that I have run into a dead-end.

In fairness I must also say that several of the semi's I listed above are available NOW for shorting. But seeing that most of them took a nose dive last Friday (7/06) they are no longer the attractive candidates for shorting that they were several days ago.

The bottom line is that, in my experience with IB, when I find something that looks ripe for a pull-back, it is usually not available to short. This was seldom an issue at Datek. And no, I don't want to go back to Datek. Even if IB stays exactly as it is, it is in a whole different league vs. Datek and I will happily stay with IB.

Just wondering if anyone agrees and whether anything can be done to improve the list of available shorts.
 
I've had a couple of conversations with the treasury group regarding the short list.

IB relies on electronic lists provided by the various lenders to see if stocks are available and can only allow users to sell what is known to be available. The treasurer is in discussions with additional lenders and hopefully the list will become more comprehensive in the near future.

 
no, a clearing house could mark to market a position if a firm does not deliever a stock but does have the right to force a buyback. (For example in Hong Kong the clearing house used to give 1-2 days leniency but no longer does so).

The brokers clearing agent (IB self clears) not the clearing house is responsible for delivering stock on the settlement date.
 
Thanks, def, for replying to my post. I appreciate that.

I don't mean to press the issue too much, but I have some more examples of Nasdaq stocks un-shortable at IB.

Today, (7/31) for example, WFII, EXPE, BBOX, ECLP, and PCLN (that I know of) could not be shorted.

PCLN is a 6M volume (3 mo avg., according to finance.yahoo) stock which reported +.03 today. PCLN, BBOX, and ECLP are all over 1B market cap.

I have also noticed a pattern, i.e. often stocks are not available to short when you would like to do so, then they BECOME available later.

CORR is an example of this. CORR announced earnings +.01 before open on the 17th...and gapped up nicely. But was not available to short. It went up again on the 18th then dropped a point by the end of the day.

I checked on the 19th and CORR was available to short.

Another opportunity was missed on the 13th when China.com, a $3 stock at the time, gained more than a full point (to $4.15) on the news that the 2008 olympics will be help in China. CHINA was not available to short. It went back down almost a full point the next day. By the third day it was below $3 again. I would have bet that that would happen. I mean I would have bet, literally, that that would happen. Oh well...

thanks for listening
 
I'm about to switch to IB, and was here checking on their short list (or lack of). I was hoping to get away from doing what I do at Brown and Co., but it sounds like I may still have to do it. My solution to shorting has been to keep my short positions in my "Short" account and cover by purchasing an offsetting position in my long account. This sucks up some margin, but lets you keep your favorite stocks for shorting always available. I keep 10 stocks locked up in my short account at Brown and Co., and just sell (not short sell) from my long account when I want to go short. No uptick rule or bad fills (most of the time). I swing trade and don't use margin so it's worked fine for me.
 
You must log in or register to reply here.
Back
Top