Short Borrow Fee Interest Calculation

[deanstreet]

I am not very clear on how short borrow interest fee is calculated.

I shorted 3700 NIO shares today and its share closed at $42.8 today.

I don't understand why the loan is based on $45 instead of $44.

Loan per share = Ceiling (closing price x 102%)
               = Ceiling (42.8 x 1.02) = 44 != 45

 

[HobbyTrading]

I don't understand why the loan is based on $45 instead of $44.

How do you know on what price the loan value is based? Did IB inform you of that?

 

[deanstreet]

How do you know on what price the loan value is based? Did IB inform you of that?

It is shown in the statement obviously.

 

[traider]

I think they round the share price up. Also the short interest rate fluctuates throughout the day

 

[comagnum]

This is what I use to calculate the daily short carry cost. The current NIO fee rate I used is 0.29% for NIO.

Column I formula =(G48*102)*F48/360*H48/100

 

[d08]

I think they round the share price up. Also the short interest rate fluctuates throughout the day

Isn't the short interest rate based on the closing price? There's no intraday interest anyway for shorts.

 

[deanstreet]

I will confirm with IBKR if the loan stock price deviates from my understanding for a few more days. I just guess that for some more-volatile stocks, the price factor is above 102%.

 

[lpope]

There's a lag in borrow fees on the statement. Borrow is on T+0 and stocks are on T+2 so the price used in the calculation lags by two trading days.

 

[deanstreet]

There's a lag in borrow fees on the statement. Borrow is on T+0 and stocks are on T+2 so the price used in the calculation lags by two trading days.

Ah..maybe that's exactly what it is