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Looking for broker to short pennies; anything better than Suretrader?
- Thread starter stang351
- Start date
one of his assistants did send me an email last night, which was blocked at work and i forgot to watch. just watched.
he says he used interactive brokers and e-trade in 2016. takes a while for him to get to the point, but later he implies and eventually just says that he uses interactivebrokers account for shorting the pump and dump/penny stock types. he doesn't get into the fee structure much, but at least for his experiment he uses a smalish ($10k) balance, so i guess thats a positive.
I'm looking into it. Tim is the definition of a short-term trader (when i subscribed 2 years ago... it was often buy or short, with a hold on the order of minutes... so i wouldn't be surprised if his broker isn't as good for a long-term short. Browsing through interactive broker's fees, at least to my eyes they aren't explained as clearly as most... but i don't see an overnight short fee. So thats nice, if I'm reading it right.
Speaking for IB, hard-to-borrow fees, if any, are not assessed until the shares are actually borrowed at the settlement date, T+3 (this assumes that you do not pre-borrow). If you close out your short sale on the same day the trade was opened, you're position will be flat at settlement and you will not incur any borrow fees. Note, however, that the broker still needs to be able to perform a locate in order for you to initiate the short sale order.
As for why shares which are non-marginable may be available for lending, clients may hold non-marginable shares in the same account as marginable, and to the extent a broker has the right to apply a margin lien for pledge/loan purposes, they can apply that to any shares held in the account, subject to the dollar limit.
If you have a particular security that you are interested in shorting and would like to know the current availability, send me a PM.
I would want to be upfront with my clients about all the "gotchas" so they wouldn't be pissed when they were surprised by fees. I run a business, and I never never never want my customers to be surprised by fees, especially one's they wouldn't reasonably expect. I also would never leave out important information, i.e. if they ask me about a particular scenario I'll tell them all the pluses and minuses, which in this case IB didn't do. If I don't want customers to do something, I don't offer the service. It's that simple. Oh, and I hire customer service reps who are experts in our field and friendly and helpful. IB hires the least competent and least helpful people they can find to staff their customer service.If you were IB, would you want underfunded client shorting penny stocks?
IB is free to set up whatever crazy margin and rounding schemes they want as well as provide worthless and hostile customer service, and I'm free to make sure everyone knows about them since IB certainly isn't going to go out of their way to tell anyone. If you or anyone else still want to go with them, knock yourself out.
your reply shows that you are extremely knowledgeable and detailed oriented. of course the devil is in the details. how come you are still there? for the sake of balance why don't you list the positives that keep you there.One more great thing about IB, you get to work with the world's least intelligent customer service team.
Oh I'm long gone. But they pissed me off so much I make sure that every other unsuspecting potential customer doesn't have to go through the pain I did. Their pluses were originally low commissions and a larger universe of tradable products than their competition. It turned out that one unexpected autoliquidation kills years of commissions savings and by going with a couple different brokers I could replicate the products I wanted with less hassle than a single call to their "customer service" team, so you add that to all the minuses and I'd be crazy to stay with them.your reply shows that you are extremely knowledgeable and detailed oriented. of course the devil is in the details. how come you are still there? for the sake of balance why don't you list the positives that keep you there.
Etrade. sign hard to borrow statement. off you go. i use them to short uvxy but small cap borrows are sometimes available
they told me they couldn't do these tickers, even after signing the hard to borrow agreement. i jumped through all of etrades hoops then was told it wouldn't work.
I've been using Scottrade for 10 years, and have generally been happy with it, but I want to short a # of penny stocks (well, not all pennies technically... OTC/BB stocks ranging from 5 cents to a few bucks in price at this time).
They don't offer the ability to short the stocks I'm looking for. Neither do Etrade and TDAmeritrade.
I have mostly finished signing up for a Suretrade account, and they seem to both allow shorting of these stocks and have access to shares. But one fee - of the many, Suretrader has an insane pile of fees - that is worrying to me is a 1% overnight charge on all shorts.
I'm not planning to short something and sell it the same day; in my mind it might take a month for the world to end for this stock like I hope. But clearly, unless I'm shorting very quickly, Suretrader's fees will kill me.
Are there any other brokers out there that:
a) Allow shorting OTC type stocks
b) Have decent access to shares
c) Have good fee structures, in particular nothing like that 1% overnight fee. I'm okay paying a little more than the $7-10/trade I'm used to on scottrade, though obviously all fees have to be reasonable.
I'd be trading w/ an account in the $5-25k range.
Thanks all!
You may want to check out:
http://centerpointsecurities.com/
I don't use them but many shorters do.