Short Availability

[frnw]

Guys,

How do you deal with finding short availability?
Do you have accounts with multiple brokers that have locates for different stocks at different costs or what?
If so, how do you disperse your capital, for me personally it is hard to have adequate trading capital in several brokers, even more so with the purpose of shorting?

 

[stepandfetchit]

For positions you expect to hold short for some time (days/weeks/months), and the underlying has options, consider using synthetic shorts. IE if price is say $50 ish, sell the 50 Call and buy the 50 Put using an expiration longer dated than you expect to hold the position. I do this for NTB and HTB underlying's.

 

[Strangertrader]

Why do you even bother shorting… The risk on the short side is unlimited, just go short by buying puts.

 

[Stratter]

Maybe he tries to keep it simple. With options you have to be right not only for the price at which you get in and the direction of the trade… you might be right for both of those, but get it wrong about the expiration date, the liquidity of options is a problem as well… he might not have access to options trading.
If such is the case... I understand that it is hard to have a big trading account, and even harder to have several such accounts for different purposes. Even if you do, the execution part might become a problem. Again, it depends on what you are doing, what is your time horizon and risk appetite. For example, at the moment I have one main trading account in which I day trade and swing trade, both short and long side, and I have another account that is for longer time horizon trades which is a lot smaller but is a cash account. The important thing is knowing what you do – if you have your process distilled it is easier, if you are testing different things, you might need more resources… I’ve tried shorting penny stocks, I’ve tried trading only ETFs or only common stocks, I’ve tried some other more obscure instruments.. It basically boils down to this - are you willing to pay more for locates for illiquid, small and not widely known stocks or have a broader access to free locates but only for the well known names… Are you trading only the US markets or Europe as well… Lots and lots of questions.

 

[frnw]

I haven’t come across paid locates, what do you mean by that, on what basis are you charged when using such locates?
In my experience, my only costs, in this case, are short-margin interest costs.

 

[zdreg]

For positions you expect to hold short for some time (days/weeks/months), and the underlying has options, consider using synthetic shorts. IE if price is say $50 ish, sell the 50 Call and buy the 50 Put using an expiration longer dated than you expect to hold the position. I do this for NTB and HTB underlying's.

You posted an advanced strategy which should be on another thread. . You are addressing an audience on this thread who don't know the basics of options or shorting. These people don't know when to enter an order or to price a trade, particularly where quotes are a mile wide. Then you throw in acronyms.

If you want to do something useful recommend books on basic trading to this group.

 

[stepandfetchit]

You posted an advanced strategy which should be on another thread. . You are addressing an audience on this thread who don't know the basics of options or shorting. These people don't know when to enter an order or to price a trade, particularly where quotes are a mile wide. Then you throw in acronyms.

If you want to do something useful recommend books on basic trading to this group.

FWIW: I had similar thoughts to OP a few months ago, with the inability to place new short positions when I needed a new entry due to Hard To Borrow (HTB) issues from my broker preventing acceptance of my order. Even after enrolling in their Hard to Borrow program. The extra incentive to seek alternate solution came when the HTB fees increases in one day more than 3 times my original fees. (increases seemed unbounded, which were not tolerable to me). Sometimes, pain can help us to learn about alternatives that are more palatable.


BTW: We don't kneed no stinking books!

 

[vanzandt]

Why do you even bother shorting… The risk on the short side is unlimited, just go short by buying puts.

$100 bucks says @MacBookProHo has a new ID.

 

[TradeZero_Dan]

FWIW: I had similar thoughts to OP a few months ago, with the inability to place new short positions when I needed a new entry due to Hard To Borrow (HTB) issues from my broker preventing acceptance of my order. Even after enrolling in their Hard to Borrow program. The extra incentive to seek alternate solution came when the HTB fees increases in one day more than 3 times my original fees. (increases seemed unbounded, which were not tolerable to me). Sometimes, pain can help us to learn about alternatives that are more palatable.


BTW: We don't kneed no stinking books!

We would love to help you out with the HTB issues you are having. We have recently redone our overnight borrow pricing and give you the ability to check the estimated rates on the overnights. You can use this calculator on a daily basis to decide if you want to remain short or not.

At TradeZero, we specialize in the facilitation of short selling, including our patent pending short locator product that allows you to sell back your no longer needed locates and preborrows.