What is borrowing fees ?

[destriero]

TDA had no short-availability as of yesterday so I did the synthetic with long shares instead of short. "it can be a bit lower" is the equivalent of Musk shitting in your mouth.

 

[FSU]

If you want to sell something that you don't own, you have to borrow it from someone. Of course borrowing is not free so you have to pay a fee for that which is the borrowing fee.

It doesn't just apply to hard to borrow stocks but to every stock you want to borrow for shorting.

The less of a particular stock there is and the higher demand for borrows the higher the borrowing fee will be.

This is not really true. You are paid a short stock rebate (yes you are paid to short a stock) when you short a non hard to borrow stock. While this may not happen in many retail accounts, this is the norm in professional accounts. Typical rates are usually slightly less than you would get for a standard credit balance.

 

[Overnight]

In 99% of the cases you're still r*******

What is this r******* going on between you two. What word or phrase is it meant to represent?

 

[JackMorgan]

TDA had no short-availability as of yesterday so I did the synthetic with long shares instead of short. "it can be a bit lower" is the equivalent of Musk shitting in your mouth.

get a real broker

 

[taowave]

Haven't dealt with this in a long time,but your wording is tricky.i don't believe you are paid to short a stock,but rather collect interest on the credit balance from the short minus the borrow fee.I think we are all saying the same thing. It's been a long time since I traded reversal type strategies,so I may be off

This is not really true. You are paid a short stock rebate (yes you are paid to short a stock) when you short a non hard to borrow stock. While this may not happen in many retail accounts, this is the norm in professional accounts. Typical rates are usually slightly less than you would get for a standard credit balance.

 

[FSU]

Haven't dealt with this in a long time,but your wording is tricky.i don't believe you are paid to short a stock,but rather collect interest on the credit balance from the short minus the borrow fee.I think we are all saying the same thing. It's been a long time since I traded reversal type strategies,so I may be off

Yes basically selling the stock short generates a credit balance which you are paid interest on.

My rates are based on the Fed Funds rate. I pay a bit over for a debit balance, I get a bit under it for my credit balance. My short stock rebate rate is slightly under my credit balance rate.

 

[MrMuppet]

This is not really true. You are paid a short stock rebate (yes you are paid to short a stock) when you short a non hard to borrow stock. While this may not happen in many retail accounts, this is the norm in professional accounts. Typical rates are usually slightly less than you would get for a standard credit balance.

you're not paid a rebate to short a stock, you're either paying a borrow fee or nothing for borrowing.
Receiving interest on your credit balance is not the same as a borrowing fee

 

[FSU]

you're not paid a rebate to short a stock, you're either paying a borrow fee or nothing for borrowing.
Receiving interest on your credit balance is not the same as a borrowing fee

Short stock rebate is not the same as simply getting interest on a credit balance. As mentioned, my short stock rebate rate is slightly less than my credit balance rate. It is similar in effect as when you sell a stock short you generate a credit balance, but you are paid differently here, and it is called a short stock rebate.

When I short a not hard to borrow stock, I am literally paid a "short stock rebate" this is how it is listed on my sheets, and I am quoted a general rate for short stock (slightly less than a credit balance rate)

 

[taowave]

Not a margin guy,but isn't the short stock rebate simply the credit balance rate minus the fee for borrow??

The fee could be miniscule or it could be enormous for a stock with buy in risk.In that scenario the effective stock rebate is negative and the borrower is not collecting interest,but actually paying to borrow..

We are saying the same thing..

 

[MrMuppet]

Short stock rebate is not the same as simply getting interest on a credit balance. As mentioned, my short stock rebate rate is slightly less than my credit balance rate. It is similar in effect as when you sell a stock short you generate a credit balance, but you are paid differently here, and it is called a short stock rebate.

When I short a not hard to borrow stock, I am literally paid a "short stock rebate" this is how it is listed on my sheets, and I am quoted a general rate for short stock (slightly less than a credit balance rate)

ok that sounds interesting. That must mean that someone is paying you to take their stock out of their hands. Which broker do you have your account with?