Shorting Stocks - (newbie question)

D

dailyramadah

Hey guys,

I'm new to trading so please don't be too hard on me. :)

When I'm shorting stocks, sometimes the stocks are unavailable to short. Is there a reason for this? Can someone explain to me why this is and how I can know before I want to enter a trade whether the stock will be available or not?

Thanks!
 
Short a stock you don't have requires the brokers to find a "locate" and give you permission to short the stock so they can make good delivery.

If your firm can't get a locate, you can't short it.
 
So it's up to the broker to be able to "find" them. I see...and what do you guys think of Interactive Brokers? I've heard they're good from other sources and I might change...aren't their commissions $1 in/ $1 out?
 
Quote from hoodooman:

FOR 100 SHARES
More...

I haven't traded stocks at IB for over a year, but it used to be (per side) 50 cents per 100 shares with a minimum of $1 (of US stocks)
 
Questions about liability to pay dividends when short.

(1) At what point in the holding of a Short in a stock will you have the liability of paying the dividend.

( e.g. : Acquiring before ex-dividend date ? Acquiring after ex-dividend date ? )

( e.g. : With respect to the first question, where/how does the liability relate --or does it-- when holding the stock Short through the dividend payment date ? )

( e. g. : if the liability for having to pay dividends for holding a stock Short becomes a reality, and if the liability can be removed prior to the dividend payment date, must the Short be covered PRIOR to the start of the three days for clearing the closed Short position ? )

A lot of questions here. Can you direct me to a resource for reading on the subject ?

Much thanks.
 
Quote from deucy28:

Questions about liability to pay dividends when short.

(1) At what point in the holding of a Short in a stock will you have the liability of paying the dividend.

( e.g. : Acquiring before ex-dividend date ? Acquiring after ex-dividend date ? )

( e.g. : With respect to the first question, where/how does the liability relate --or does it-- when holding the stock Short through the dividend payment date ? )

( e. g. : if the liability for having to pay dividends for holding a stock Short becomes a reality, and if the liability can be removed prior to the dividend payment date, must the Short be covered PRIOR to the start of the three days for clearing the closed Short position ? )

A lot of questions here. Can you direct me to a resource for reading on the subject ?

Much thanks.
More...

If you are short a stock on the X-DIV date, you owe the dividend to the person you borrowed the stock from.
 
Quote from hoodooman:

Even interactive brokers has this problem sometimes.
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FinViz keeps a list of "shortable" stocks, but like IB I think the list will never be realtime updated.

Does *any* broker or other service keep a list of shortable equities, updated often enough to be considered realtime?
 
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