Why Charles Schwab Broker show everything " Hard to Borrow" ?

[ph1l]

for a broker who has more than 10 trillion in assets any stock should be easy to borrow

Maybe most of the assets are in cash accounts and not lendable?
https://www.schwab.com/legal/schwab-brokerage-account-agreement

8. Loan Consent
You agree and acknowledge that Securities and Other Property held in your Margin Account, now or in the future, can be borrowed (either separately or together with the property of others) by us (acting as principal) or by others.

 

[zdreg]

Many large cap and most Mid to Small cap stocks shows "Hard to Borrow" for short selling almost around two months now. I assume it's just matter of time that they have to " Buy to cover" their short position and short sqeeez will happen and and these stocks will all shoot up ?
I am with charles schwab and they are biggest broker who own Ameritrade, Usually they large inventory of stock to borrow. What these can tell you ? thanks[/QUOTE

It tells you nothing. Hard to borrow means that there is a fee to borrow. Most fees are around .0025 per year. 100 shares of a$25 at .0025 is $6.25/year or less than 2 cents/day.

 

[kmiklas]

Many large cap and most Mid to Small cap stocks shows "Hard to Borrow" for short selling almost around two months now. I assume it's just matter of time that they have to " Buy to cover" their short position and short sqeeez will happen and and these stocks will all shoot up ?
I am with charles schwab and they are biggest broker who own Ameritrade, Usually they large inventory of stock to borrow. What these can tell you ? thanks

I've wondered this myself.

My theory is that since there's higher short interest fees for "Hard to Borrow" stocks... so they label pretty much everything that way.

 

[TradeTune]

So far nobody could answer it ... Everyone knows meaning of "Hard to Borrow" , but why a stock becomes "Hard to Borrow" ? And how does it affect that stock ?

 

[Robert Morse]

To those that use CS, I’m confused. Do they not allow shorting, or do they not provide locates on HTB or only do that for certain customers that qualify?

 

[AR15]

To those that use CS, I’m confused. Do they not allow shorting, or do they not provide locates on HTB or only do that for certain customers that qualify?

This guy doesn't know what hard to borrow means. he thinks that because he's holding onto some hard to borrow stocks all of them are going to squeeze just because shares ran out at Schwab, completely forgetting there are other brokers that cater to short sellers that have many times the locate availability of Schwab

 

[Robert Morse]

Given that I have not worked in a stock loan department, so there is only so much I can understand about the inventory of locates, here is some information for those that know less than me. Each day, a clearing member needs to evaluate what symbols they have ample inventory either in house or through other clearing houses, to create a list of Easy To Borrow Stocks (ETB). They then look for symbols they can’t locate and recently have been failing to get borrows to meet current overnight shorts. Those symbols are Threshold symbols. Those are not available to short. The rest that are not ETB or Threshold, are symbols that require a Locate. A Locate is not a pre-borrow for overnight, it is permission to send an order to short that symbol. I’m not sure how each clearing firm determines how many shares they can provide Locates for, but they offer that inventory with some process to their clients. On Lightspeed Trader, on the Level 1 part of our Market Maker Window, we display E-ETB, L-Locate or T-Threshold. All Margin accounts can request a locate through either our service team or with a tool built into Lightspeed and Sterling Trader Pro. The Locates from the service team come from our inventory from Wedbush Securities and the Locate tool offers third party locates that have a cost per share.

This guy doesn't know what hard to borrow means. he thinks that because he's holding onto some hard to borrow stocks all of them are going to squeeze just because shares ran out at Schwab, completely forgetting there are other brokers that cater to short sellers that have many times the locate availability of Schwab

 

[TradeTune]

To those that use CS, I’m confused. Do they not allow shorting, or do they not provide locates on HTB or only do that for certain customers that qualify?

To those that use CS, I’m confused. Do they not allow shorting, or do they not provide locates on HTB or only do that for certain customers that qualify?

Hi Robert, I Just checked any stocks symbols that has HTB next to them , in the column "Short Sell Availability" it shows empty and stocks which show "available" , these stocks don't have HTB next to them.
Now does it mean that those symbols which short aren't "Available" , i can't short them? I'm not sure because i never tried to short anything in last 3 months. I have to ask Chat support team on Monday and update here.

 

[Robert Morse]

You will have to chat with them. It might be they are not offering shorting on some because they are too volatile vs HTB. At Lightspeed, we do not block shorting from volatility, but we do alter leverage based on risk.

 

[zdreg]

You will have to chat with them. It might be they are not offering shorting on some because they are too volatile vs HTB. At Lightspeed, we do not block shorting from volatility, but we do alter leverage based on risk.

The same is true at Schwab. Day trading leverage is altered based on risk assessment for a very small list of securities.