Short Stock Borrow Fee (Schwab)

[zdreg]

Or you could do the synthetic long in options and get almost the full borrow rate, without having to split it with your broker.

1.That assumes a certain level of sophistication
2. it applies to GME but not to most stocks either because options don't exist or they trade illiquidly.

 

[stepandfetchit]

The stock borrow fees are displayed in Schwab's platform when placing an order to sell short. And they did indeed send messages informing us that the rate had changed.

I wasn't paying attention. I did not think the fees could be so high, even for something hard-to-borrow.

FWIW: I had similar, but much less drastic experience with the low HTB fees at TDA. I think they may have been something like 2% or less when I began using them which looked very good to me, and one day observed 13% with like a 4% increase since prior day (I had ceased monitoring the daily rates as well). This prompted my transition to alternative shorting, as I was not in control of the costs.

 

[zdreg]

I dont mean to sound harsh but shame on you for not checking that SLB/CTB fee before doing a swing trade on a stock with a high borrow fee. It's grade school level math to figure that fee.

That was not the issue. It was the OP's lack of knowledge about daily fee rate changes and not reading his emails concerning changes in the fee rate. His genuine response shows that he has learned from his experience. My guess is that in the future he will take trading seriously by studying trading and educating himself in what he is trading.

 

[JackMorgan]

The borrow fees they get these days are a bigger scam than PFOF.

 

[zdreg]

The borrow fees they get these days are a bigger scam than PFOF.

Do you trade with Schwab?

 

[tomkat22]

That was not the issue. It was the OP's lack of knowledge about daily fee rate changes and not reading his emails concerning changes in the fee rate. His genuine response shows that he has learned from his experience. My guess is that in the future he will take trading seriously by studying trading and educating himself in what he is trading.

Looks like the fee was already 80% on the day he entered the trade.Way too high for my taste on a swing trade that might be held for several days/weeks. But I suppose everyone's "taste" might be different.

 

[JackMorgan]

Do you trade with Schwab?

this has nothing to do with schwab

its street wide scam

 

[FreeGoldRush]

The borrow fees they get these days are a bigger scam than PFOF.

If someone chooses to lend and someone chooses to pay then what is the "scam"? Are you simply calling above X% a scam, or is there something more sophisticated?

 

[zdreg]

If someone chooses to lend and someone chooses to pay then what is the "scam"? Are you simply calling above X% a scam, or is there something more sophisticated?

It is a important discussion that should not take place here but on a thread of its own.

 

[JamesJ]

The stock borrow fees are displayed in Schwab's platform when placing an order to sell short. And they did indeed send messages informing us that the rate had changed.

I wasn't paying attention. I did not think the fees could be so high, even for something hard-to-borrow.

Borrow fees can even go way higher.
Check out REV, borrow rates did skyrocket to almost 1000 (!) %.

And with T+2 settlement you keep paying even after you did close the trade.