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You can Short MOST equities Free, yes. You have to Pay the Divs tho,if Any, if stay in.. Unless with like IBKR/Hood or other 3rd rate Brokers, they charge for everything. The real good ones have HTB fees .25%- XX%.
ETFs don't have fixed share counts. And XRT is used as a synthetic short of the HTB stocks it contains.
I would echo the advice to call your brokerage, as policies can vary. Until recently on RH short shares were not supported, so they would exercise the long option to cover pretty consistently. It certainly happened enough to change my behavior around dividend payers and HTB stocks. But they now support short selling, so I believe they might let it ride if your account has the buying power to support the short position in the underlying.
CTB is high and short volume is high, agreed, and can signal stress, but short volume isn’t net short interest. The Dec 12 8‑K shows 157,779 shares issued for preferred redemptions (not “<150k”), and the Nov 19 8‑K shows 1.75M shares authorized for more stock‑settled redemptions (overhang). Pops can happen on HTB microfloat, but that’s not the same as a trapped-short “next SMX” setup.
It really has. An amazing CC play for sure. I milked the shit out of AMC for a while too before the big drop. HTB was insane so I ran it by just rolling puts for the additional extrinsic vs shares and calls
You assumed MSTR is going Down. You Short MSTU, not BUY the Inverse. MSTZ -32%, of which -27% is simple comparative Math on a HIGHLY daily swing rate stock. Even if MSTR was up 65% over a year, your still in the money Shorting MSTU(Less \~12%HTB).
Im in today. What news? Is this a minor squeeze? HTB is up.
There are 5 requirements for a short squeeze to exist: 1. High short interest in relation to the float. This is the fuel. You want at least 20% of the float or higher shorted for a real squeeze. 2. Limited available shares, low float, locked up shares, shares tied up in options/ delta hedging. Squeezes need scarcity, the fewer shares there are to short the long it takes for shorts to cover. 3. A catalyst that forces shorts to panic Examples: Surprise earnings beat FDA approval Acquisition / buyout rumor Retail piling on( I love this if it happens correctly) Heavy unusual call option flow 4. Rapid upward price movement. This is what triggers margin pressure. The stock has to: Move up fast enough that shorts start losing big Blow through resistance levels Create automated stop-outs and margin calls Shorts don’t cover slowly, they’re forced out when pain is fast. It’s the fast upward momentum that kills shorts every time. 5. Expensive borrow rates and limited shares to borrow. Some will say a minimum of 20% CTB, but 45-50% is the sweet spot in my opinion. But the higher the better. You also want HTB to be consistently 1k or less and hitting 0. This tells you shorts are already crowded and desperate.
That is a really good answer. Thank you. If I stick to SPX, XSP, SPY, similar underlyings, and only use the buying power that is not purely based on the actual cash in my account, would that be a good way to start if I need to limit my losses? At some point I have to actually use real money, but don't want to get wiped out. Or for any debit or butterfly or iron condor spread, always leave enough cash to cover the assignment on the short leg(s), as though the other leg isn't there? Even if I were to do that, and let's say that amount is "x" but they suddenly and randomly require "4 x x" or "10 times x" - if it is multiplying the amount required to open the spread on a simple butterfly or call option by that multiplier, one might still maybe be okay depending on how much free buying power you left out...but if they multiply the buying power required to cover assignment on short leg(s) by 10 as though the protective legs aren't even there, that is way more money than my account would have in the beginning. I guess nothing is sure but I am looking for a way to move from being in the learning stage to actually trading in the safest way possible. Mostly going to stick to XSP at first as assignment isn't an issue and it won't be that HTB ever - but huge changes in buying power requirements could hurt me. Also, if I could ask more thing... let's say I could start by opening an account with 10K-50K as a beginner vs. the 125K required for portfolio margin, is it better to go with the latter right away as the extra buffer might protect you when the requirements are raised? I'll be starting with Schwab if that changes the answer at all. Sometimes in life it is best to start small but sometimes starting at a slightly higher amount gives you more protection.... Again, I appreciate the help...thanks very much.
Is it possible? Yes. Is it likely to happen with typical market scenarios? No. Have extraordinary circumstances happened that have caused something like this to happen in the past? Yes. TL;DR - there's no accounting for tail risk, but fortunately, it doesn't happen very often. The most common of this rare occurrence is when the underlying transitions to hard to borrow, like what happened to GME during the squeeze of early 2021. Typically, margin on individual short contracts is in the 20%-30% of assignment value range, but when the underlying goes HTB, that jumps up to 100%. It wouldn't matter if the contract is in a defined-risk structure, if the shares are hard to borrow, that's a liability for the broker and they don't like having open-ended liabilities on their books. They want to shift all the risk onto you.
$CYPH HTB RIDE THE WAVE TO $4 MOMO PLAY Momentum still hot
I pay roughly 2k Mth at Fidelity & $800Mth at Scwab in HTB fees. 1.25% is annual Divs. On about 1 Mill Shorted, the Math tho works much Bigger in My Favor. I get Paid the Profit(or pay it) every M2M time(weekly usually), No tax, deferred till I cover Lots. Yes Short term Gains, but My Runners are in the Tax Advantaged accounts. My Margin account has 1 runner, several Hedges and will usually always Lose Money. Keeps Drawdown Down to a tolerable rate for me on all my accounts combined. I aim for 65-75% annual CAGR, Avg 53.5% last 7 years. Made only like 2-3% in 2022, yet a lot better than 99.5% other people. I don't make the excessive 100%+ like swing traders, Because I don't know how to time the market.. ok, done.... why can't post pics in this forum? Thats stupid... Bests...
https://testfol.io/?s=lxOmktF8A78. Here, you pay \~$1,150 in HTB fees, NOTHING else to short SOXS(Factored in). Beats the Index and the Long 3x LETF. It's Math, NOT Rocket Science!
Currently has 0 shortable shares @ HTB with a high 17.55% borrowing fee. Stonks only goes up.
If you exercise your put and you have no shares in your portfolio, then your broker must short those shares. That means the borrow desk must locate those shares. Hard to Borrow means your broker has little or no shares in its customer accounts left to borrow. Since the desk has to locate these shares at another brokerage, they charge the HTB fee. None of this matters if you never exercise your put. However, if you leave it to expiry and the pit ends up ITM, your broker probably has a policy to auto-exercise that put. In that case, we’re back to the HTB fees again.
Was looking at this but a different stock TGL, it’s also ‘HTB’ and ‘maintenance’ is 400%
You might be better off avoiding, HTB can be a sign of a potential short squeeze.
Schwab showing GLD as HTB…?
Well like someone else said, things get HTB when "the shorts" have shorted a lot. So it just seems to me that something with 62M volume would be harder to get a sort of short squeeze going (leading to HTB) than something like a GME with 6.2M.
I think you and I have chatted about GLD before, but thanks for bringing this up, because I've been seeing it on Schwab's ToS for GLD also and thought it was weird. Daily volume of 62M and shares are HTB??
Should not be impacted by HTB, since the short call is covered.
Jesus, GLD is HTB right now? GLD takes a little breather on its runnup for profit taking and the shorts come out of the woodwork? Maybe they think it's Bitcoin crash redux. This market is nuts.
It can impact on options trading, particularly if you trade for credit. The initial margin requirement on naked shorts goes up, usually to 100%, for contracts on HTB tickers.
When stocks are shorted they are borrowed from the broker and sold at the market.The hope is that share price declines and they can be bought back cheaper and returned for a profit. When a stock is listed as HTB it means there are less shares available for shorting and it may incur additional fees and costs to short.
I did some back tests and got mixed results. Shorting some performed well. Some mediocre. Some blew up the account even at allocations of around -10% (there's survivorship bias to consider and gearing ratio changes). We could cherry-pick out the ones that did well, but that would likely be overfitting to past performance, so I would be wary of that. I also forgot before that these ETFs are often HTB because it's popular to short them. I don't know at the moment what the typical interest rate to borrow them would be, but it might counteract the performance gains of shorting them. Also note that shorting two opposite leveraged ETFs against each other is effectively a short-volatility strategy. Such strategies tend to have long left tails and are positively correlated to the market despite targeting market-neutral. Keep that in mind for portfolio construction and be careful.
That SI position is 5x what it actually is. I didn’t calculate free float so can’t speak on the % reported. I’m counting 15.1M as of yesterday at close. I don’t have a HTB on this one either.
Back when I was heavily into scalping and day trading, certain platforms were better to use depending on what you were trading. TOS/Schwab had fairly decent charting and was good for trading shares, but there was a delay with options quotes (don't know if they ever fixed that) ETrade was good for shorting because for a fee you could short HTB shares that weren't available to short on other brokers Fidelity had really good level II, and I swear I got better fills on options trades with them than other brokers for a while IBKR was one of the first to let you trade SPX options during premarket and overnight trading ....And then there's the platforms I used to trade futures like TradeNinja and Tradovate, but I think you get my point There was never a good one size fits all unless you were only focusing on one type of trading vehicle/trading style
For situations like this, I generally avoid tickers with hard-to-borrow issues altogether and stick with index options like SPX. No borrow fees, cash settlement, and you sidestep the whole HTB warning problem. I’ve also found it’s better to focus on one instrument rather than spreading your attention across many different tickers. The longer you trade SPX, the more you start to recognize its behavior and patterns - it becomes quite predictable over time. Advanced AutoTrades sends SPX credit spread signals I can execute hands-off. That way, I’m trading a highly liquid underlying with clean fills, no borrow constraints, and clearly defined risk per trade. Even if you’re doing it manually, SPX spreads tend to be easier to manage, especially around assignment risk, since you’re dealing with cash settlement instead of stock delivery...
For situations like this, I generally avoid tickers with hard-to-borrow issues altogether and stick with index options like SPX. No borrow fees, cash settlement, and you sidestep the whole HTB warning problem. I’ve also found it’s better to focus on one instrument rather than spreading your attention across many different tickers. The longer you trade SPX, the more you start to recognize its behavior and patterns - it becomes quite predictable over time. Advanced AutoTrades sends SPX credit spread signals I can execute hands-off. That way, I’m trading a highly liquid underlying with clean fills, no borrow constraints, and clearly defined risk per trade. Even if you’re doing it manually, SPX spreads tend to be easier to manage, especially around assignment risk, since you’re dealing with cash settlement instead of stock delivery...
For situations like this, I generally avoid tickers with hard-to-borrow issues altogether and stick with index options like SPX. No borrow fees, cash settlement, and you sidestep the whole HTB warning problem. I’ve also found it’s better to focus on one instrument rather than spreading your attention across many different tickers. The longer you trade SPX, the more you start to recognize its behavior and patterns - it becomes quite predictable over time. Advanced AutoTrades sends SPX credit spread signals I can execute hands-off. That way, I’m trading a highly liquid underlying with clean fills, no borrow constraints, and clearly defined risk per trade. Even if you’re doing it manually, SPX spreads tend to be easier to manage, especially around assignment risk, since you’re dealing with cash settlement instead of stock delivery.
For situations like this, I generally avoid tickers with hard-to-borrow issues altogether and stick with index options like **SPX**. No borrow fees, cash settlement, and you sidestep the whole HTB warning problem. I’ve also found it’s better to focus on one instrument rather than spreading your attention across many different tickers. The longer you trade SPX, the more you start to recognize its behavior and patterns - it becomes quite predictable over time. **Advanced AutoTrades** sends SPX credit spread signals I can execute hands-off. That way, I’m trading a highly liquid underlying with clean fills, no borrow constraints, and clearly defined risk per trade. Even if you’re doing it manually, SPX spreads tend to be easier to manage, especially around assignment risk, since you’re dealing with cash settlement instead of stock delivery.
Do you want to name names? If you're worried about a near-term pullback and want to protect your profits without risking getting the shares called away you can: 1) Pony up for some puts on the underlying. 2) Take an offsetting short position in other *very highly correlated* name(s). Because of the imperfect hedge here, I wouldn't go 1:1...maybe only hedge 60-70%. You can also be selective about the cost to borrow on different underlyings, AND you get to earn interest on the deposited cash (less borrow cost...be careful b/c HTB stocks can easily cost more than you earn on the cash).
If you're an MM holding a long call and short shares, exercising to flatten deltas in one transaction might be preferable to two separate transactions. I'm not a MM, but I've been assigned on slightly OTM calls for HTB stocks. When borrow rates climb into the 500%+ range, decisions can vary from the norm.
Even if it's $14.90 and you have the $15 call, why not buy the HTB shares at $14.90 before market close instead of exercising the slightly OTM option and buying at $15? Like I don't get the logic of using the option here to buy shares. You can anyway buy shares without an option.
Either a mistake by the long holder, or in some cases a OTM call may be exercised to close a short position before a long weekend if it's HTB and rates are very high.
HTB tends to increase the price of OTM put spreads. It also makes your short put more resistant to early assignment. But if your put is assigned early, obviously that won't make you short, so it doesn't increase your direct exposure to borrow fees. The only real risk there is that the short put will collect some of the borrow fee, but the long shares mostly won't, so you will probably miss out on some of the carry with long shares versus short put. >My understanding is that if the short leg is assigned, TOS would automatically exercise the long leg as well—so I wouldn’t need to borrow shares or pay any daily interest. Maybe. If your risk is too high and exercising the long reduces risk, then they might. I would not necessarily count on this, though. I feel like this is a generic warning message.
CRWV to buy CORZ, all stock, 0.1235 CWRV/CORZ. Were CORZ holders expecting a cash deal? Tough getting paid in HTB stock. [https://www.sec.gov/Archives/edgar/data/1769628/000095010325008492/dp231291\_ex9901.htm](https://www.sec.gov/Archives/edgar/data/1769628/000095010325008492/dp231291_ex9901.htm)
Pigs are stupidly expensive though. Shorting is expensive too because shares are HTB
I tried to offer $SBET awhile back. I mentioned $DGLY Friday and no one liked that because they announced the 2nd RS in two weeks. But now $DGLY has 1.668M shares, HTB (hard to borrow), and no short shares available. [https://fintel.io/ss/us/dgly](https://fintel.io/ss/us/dgly) https://preview.redd.it/gvt8q87xtg3f1.jpeg?width=1170&format=pjpg&auto=webp&s=6afdafddbdef61f10e88579e3dbedbfea47343c0
Placing your account on Margin does not mean you pay to Short. You are not buying anything and most equities do Not have any HTB or other fees. As long as you don't go over your allowed T-reg or margin equity/credit it is mostly Free. just some FYI, your not the only one that thinks this. GL...
CISO, 0 shares to borrow available right now. 17% SI and HTB fee doubled up to 85%. All of the ingredients of the epic short squeeze in the making
CISO, 0 shares to borrow available right now. 17% SI and HTB fee doubled up to 85%. All of the ingredients of the epic short squeeze in the making.
BULL No options HTB not touching it
Schwab informed me my RCAT shares are HTB and offered me a lending deal Hopefully this squeezes back to 15 (please I need it for my children)
An uncovered short call is commonly referred to as a "naked" call. It works the same way that being assigned on a short put does, except you end up with a short share position (and unlimited risk to the upside). If it is assigned overnight Friday, the position would typically show up Monday morning. How you deal with the new short share position is up to you, but you either buy the shares back at current market price to cover, or you keep the short share position open and the risk that comes with it. Do note that when you are short shares, you will likely have to pay a borrow rate/fee as long as you keep the position open. You'll usually have to pay at least 1 day's "fee" (interest) when assigned, and that rate can be absurdly high on HTB stocks.
The problem with shorting MSTR to hedge is that MSTR is a HTB stock at many brokers so the cost to hedge can be a lot higher because of the borrow fee. What are you trying to hedge?