Stock short costs (IB)

entropytrading

entropytrading

I would like to make sure a short cost.

Fee rate - Interest rate charted on borrowed shares.
Rebate rate - Fed funds rate minus the interest rate charged on borrowed shares.

I see for a stock, Fee rate = 0.31%, Rebate rate = 1.39%, so I was expecting to receive short proceeds.
During the period, that was the only stock I shorted, but the MTM interest part showed a negative number. It was denominated in a currency that I don't use except for that short so never had a negative cash balance.
 
You are charged the fee rate. Separately, you earn interest on the proceeds from the short sale according to the schedule here. For example, if you're short less than 100k USD, you pay .31% in fees and receive no interest on the proceeds.
 
thanks, i didn't realize only short balance above 100k would get paid. so only the short fee applied, gotta short over 100k to receive short proceeds is too high for retail.
 
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If the stock is fairly liquid and you expect to hold for a while, you should be able to get a rebate with options by selling a synthetic (but watch out for dividends) or with single stock futures.
 
lol I posted the same thing and my post was deleted. I'll try to be a bit more politically correct this time. I'm guessing he posts in every thread because he wants his sig to be viewed as widely as possible
 
Shadetree42 said:
Less than three hours later, someone here provided the info. he was seeking...lol. Why do you post in threads in which you are offering no help?
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nobody is perfect. balance it against the useful info. R. Morse disseminate including answering questions from posters who are not lazy to do an internet search.
 
elt894 said:
If the stock is fairly liquid and you expect to hold for a while, you should be able to get a rebate with options by selling a synthetic (but watch out for dividends) or with single stock futures.
More...

Agree. For retail who are disadvantaged by rates charged, using derivatives with embedded costs of carry can help.
 
zdreg said:
nobody is perfect. balance it against the useful info. R. Morse disseminate including answering questions from posters who are not lazy to do an internet search.
More...

correction:
nobody is perfect. balance it against the useful info. R. Morse disseminate including answering questions from posters who are too lazy to do an internet search.
 
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