IB borrow rate for BIMI 860%

Sig said:
For stocks that have options (like ZM but not BIMI), keep in mind you can sell ATM puts and buy an equivalent number of ATM calls for a synthetic short and capture the entire borrow rate. Just like the broker, even if you're "cattle class". No need to be "fucked in the ass", unless you're the kind of person who seems obsessed with such things, in which case, to each his own.
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The synthetic short stock is an options strategy used to simulate the payoff of a short stock position. It is entered by selling at-the-money calls and buying an equal number of at-the-money puts of the same underlying stock and expiration date.

I think you flipped your call and puts.
 
trader99 said:
The synthetic short stock is an options strategy used to simulate the payoff of a short stock position. It is entered by selling at-the-money calls and buying an equal number of at-the-money puts of the same underlying stock and expiration date.

I think you flipped your call and puts.
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Actually I flipped my terminology, thanks for the correction! It's a synthetic long, but will capture the borrow rate same as if you bought the stock and lent it out. If it's an expensive to borrow stock put/call parity will be broken and the ATM puts will sell for much more than the ATM calls. Take a look at ZM 71 calls right now, for example.
 
Thank you for sound input.

In case brokers lift borrow fees above the market rate, the relevant strategy must be the synthetic short stock options strategy described by trader99. The strategy will secure paying the market borrow rate instead of a potentially artificially high broker borrow rate - although there will be additional transaction costs if the options are illiquid.

The synthetic long strategy can be used to capture the borrow rate as described by Sig. Interactive Brokers do actually share part of the borrow rate with their customers. I don’t think other brokers do that? Anyhow, the options strategy will capture the entire borrow rate minus additional transaction costs of illiquid options.

Conclusion:
I think the brokers will be tempted to raise borrow rates despite the availability of the synthetic short stock options strategy, because most retail traders do not realize that they can use a synthetic short. The additional transactions costs of illiquid options in itself make room for borrow rates above the market rate.

The Bloomberg Terminal does not seem to display stock borrow rates. I guess there is no other way than to calculate the implied rate from option prices?
 
I assume all brokers disclose their borrow rates.

If someone is interested in sharing borrow rates quoted at different brokers then send a message to me. I can supply the Interactive Brokers borrow rates. Then we can compare rates.
 
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I don’t really understand the rates. I’ve seen 7-800% quite a few times this week on low floats mentioned above but the payback rate was just a few points below the funding rate. So it wasn’t that huge of a difference.
 
trader99 said:
The synthetic short stock is an options strategy used to simulate the payoff of a short stock position. It is entered by selling at-the-money calls and buying an equal number of at-the-money puts of the same underlying stock and expiration date.
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As I understand it, with underlying at the strike, Put + Carry = Call + Div

So if there's a pending dividend, it increases the put's premium, relative to the same series call. And if the interest rate rises, it increases the call's premium relative to the same series put.

But with a synthetic short, it bumps the put's premium up. Is this because the borrow rate is paid out as well? If so, I don't see how it fits into the formula. Can you provide an example? TIA.
 
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