Rebates/getting paid for shorting?

S

Saltynuts

I've listened to some podcasts, and saw at least one thread here, that talked about getting rebates from your broker. Is this still a thing, for retail I mean (if it ever was for retail)? What I remember listening to/reading is something akin to this: If you add liquidity, which is defined as placing limit orders that actually hit the market and are posted (i.e. are not filled instantly), you can potentially get some rebates. Against this is taking liquidity - that is, market orders or limit orders that are akin to market orders because they fill instantly, which can presumably reduce your rebates.

Never even knew this concept existed until relatively recently.

Second question, didn't think it was worth a separate thread because I think I have to be remembering wrong, is I could have sworn that I read a thread on here where some of y'all were talking about getting PAID interest for shorting stocks, rather than having to pay interest. I don't see how/why the former would be possible. Is indeed the case that, if anything, you have to pay interest, never receive it, to short a stock?

Thanks for any help!
 
Saltynuts said:
I've listened to some podcasts, and saw at least one thread here, that talked about getting rebates from your broker. Is this still a thing, for retail I mean (if it ever was for retail)? What I remember listening to/reading is something akin to this: If you add liquidity, which is defined as placing limit orders that actually hit the market and are posted (i.e. are not filled instantly), you can potentially get some rebates. Against this is taking liquidity - that is, market orders or limit orders that are akin to market orders because they fill instantly, which can presumably reduce your rebates.

Never even knew this concept existed until relatively recently.

Second question, didn't think it was worth a separate thread because I think I have to be remembering wrong, is I could have sworn that I read a thread on here where some of y'all were talking about getting PAID interest for shorting stocks, rather than having to pay interest. I don't see how/why the former would be possible. Is indeed the case that, if anything, you have to pay interest, never receive it, to short a stock?

Thanks for any help!
More...

Yes it does exist for retail accounts. You CAN get rebates for both adding liquidity and taking liquidity depending on the exchanges that you route the order to. It's not available at all brokers but some brokers do provide you the mechanism to get rebates on your orders but mind you I said brokers "provide you the mechanism" to do so, that does not necessarily mean you will ALWAYS be able to get rebates when you theoretically should be. Brokers can play many tricks to prevent you from getting rebates however and/or pocket the rebates themselves. Just be aware of that.

Regarding your second question, yes it is possible to receive interest and possibly higher interest when shorting stocks but it's not because you are getting paid for shorting stocks , it's because when you short stocks, your cash balance in your account becomes higher and if your broker pays you interest on cash balance in your account, the higher the cash balance, the higher interest you will receive PROVIDED that you don't short the stock too much by using margin, then in that case, you would actually end up paying interest to borrow to short the stock.
 
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Not stock, this is in options but it is an example.
 
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