Shld 25d R/r

Doesn't matter who is doing the loaning to whom, or what is being lent, or whether it's even a completely private transaction between two consenting adults, which is why loan sharking is illegal. Want to lend your neighbor $1,000 bucks fine. Ask him to pay back $1100 next week and you've broken the law, you won't be able to enforce the $100 in interest for one week in court, although you might try calling it a late fee or an annual fee, which is what credit card companies do to squeeze their already sky high rates even higher, beyond the legal caps in various states. The IB rate, and or the rate IB is charged, is flatly usurious, and should be contested in court, with regulators or at congressional/legislative levels. The SEC 'may' be toothless? C'mon ....

Bottom line really here is that most retail traders don't know don't care or are too lazy to do anything, even when they know they are getting ripped. Billions have been made since commissions were deregulated back in the 70s exploiting this sad reality.
 
Quote from Don87109:

Anyway, I'm pretty sure the IB rate reflects what they have to pay the people loaning out the stock. So I don't think the brokers are the bad guys in this case.
Well Don, I think you're a GRUP because you're over 30 and therefore you must be a bad guy too (wink)
 
Quote from nravo:

I think A.G.'s and maybe even state banking administrators need to get in on this. It is usurious, and the using an estimate of rates is dubious. They could charge anything they want and say he well it was only an estimate. Whether they do is not relevant. What is relevant is that there is no actual legal range or rate. I can a sure you that someone challenging this, especially in today's environment, would have at least a 50/50 chance of winning. Regulators have been in the pocket of the brokerage industry for a couple decades, but that's changing. This is a prime example of something that needs changing. Even the idiots at CNBC would probably make a story out of this. Broker charging 30 percent interest! Without setting the rate in advance! It's totally fugazi, which is Mafia for fraudulent.
I'm sure that the "idiots" at CNBC are chafing at the bit to do a story like this because they have never heard of things like the indicative borrow rate on short stock. And if they won't do it, all you need to do is find your Sancho Panza and you can ride off to Hartford with your idealism and fight this one up to the Supreme Court. Good luck and ciao!
 
Quote from spindr0:

I'm sure that the "idiots" at CNBC are chafing at the bit to do a story like this because they have never heard of things like the indicative borrow rate on short stock. And if they won't do it, all you need to do is find your Sancho Panza and you can ride off to Hartford with your idealism and fight this one up to the Supreme Court. Good luck and ciao!

The CNBC dolts are bending over backwards to look tough these days, so they might give this one a run. But they would probably twist it into a this is good for the market to screw the shorts this way slant. They are dolts, trust me. Used to be a journo.

Don't need to fight this one I think? Publicity alone would make IB change their policy. I'm tempted to go short some IB stock, just to see if I am charged anything. But Then again I could also be accused or talking down a stock and trying to profit from it, which is also, technically illegal, if that's my motive.
 
Quote from nravo:

Don't need to fight this one I think? Publicity alone would make IB change their policy.
Yep, a march on Washington will do the trick. Tens of thousands of protesters clogging the streets, burning IB effigies, screaming financial epithets! Populism will rule. IB will end up paying us to borrow stock to short. Sign me up!!
 
Quote from spindr0:

Yep, a march on Washington will do the trick. Tens of thousands of protesters clogging the streets, burning IB effigies, screaming financial epithets! Populism will rule. IB will end up paying us to borrow stock to short. Sign me up!!

Shorts Unite!
 
IB-AN,

You seriously do not see this as pure lunacy?

1)Your company and the trade workstation heavy client gui are both focused on active/quick trading by providing all info in one view.

2)In that gui, you have a "Shortable" column which is color coded to indicate whether or not the stock is available for short.

3)Yet to find the borrow rates one needs to go through a 5 step process by opening a browser, goto the location, lookup the exchange, etc..

4)The "current indicative rate" could EASILY be displayed on the color coded "Shortable" column in TWS to avoid all of this. If it's not to deceive the customers WHY would IB bury this info.

I mean seriously, every release god knows how many useless clunk gets added to tws, i am sure you guys could easily made the change to add the rate to the tws itself as oppose to force the customers to go through a multi-step process to find this info. If it's not deception, then why bury this very critical piece of info? you dont think whoever is shorting the stock would like to know they are paying a 23% borrow rate?

PS and yes i did submit a suggestion ticket a long time ago.


Quote from IB-AN:

If you log into Account Management and click on the Tools icon you'll find the Short Stock Availability tool provides indicative inventory information, estimates of the number of shares currently available for borrowing, estimated borrow rates, rate trends, and an indicator of how many different lenders are prepared to make their inventory available.

This information is made readily available for review prior to entering any short sale order. The rates are indicative as determining the actual rate involves an operational process which involves collecting and consolidating rate and loan activity across a range of counterparties for all securities, a process which is completed following the afternoon settlement of stocks at DTCC. These indicative rates nonetheless tend to be a good indicator of the final rate.

As to the rate level, this is reflective of the aggregate supply and demand across all brokers, not just one and rates tend to be relatively consistent across brokers. In addition, it's important to note that when you sell stock short you are borrowing the shares and that loan of shares is secured by the cash proceeds from the sale. Here cash is the collateral and not the subject of the loan itself so comparing cash lending rates to stock lending rates probably isn't the most relevant comparison especially where the supply of stock available to borrow is low.
 
Quote from newguy05:

I mean seriously, every release god knows how many useless clunk gets added to tws

I could not agree more.

They update with useless garbage, yet stuff I really NEED as an active trader is just not available.

Their suggestion box (ticket) is worthless. There are so many posts, who can go through them looking for some valuable ideas to support?

IDEA: Do you think there are enough of us here to enter a ticket - with everyone agreeing to give it 5 stars - to get their attention?

is it worth a try?

Mark
 
Quote from newguy05:

4)The "current indicative rate" could EASILY be displayed on the color coded "Shortable" column in TWS to avoid all of this. If it's not to deceive the customers WHY would IB bury this info.
That is an excellent suggestion
 
Back
Top