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Post by patryn on Dec 3, 2015 12:27:37 GMT -5
patryn ... Schwab even states that they don't lend to hedge funds. They claim Fidelity does. This is their justification for why they pay less than Fidelity. (take with grain of salt as there obviously was an agenda in that info). Here's a visual of the past year lending rate versus stock price and lending rate versus open short interest.
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Post by gestan on Dec 3, 2015 12:33:31 GMT -5
Nice visual. Nice graph.
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Post by gwb on Dec 3, 2015 16:17:12 GMT -5
Fidelity dropped the borrow rate to 40 % from 53.25 % today . This is the second 10% + borrowing drop in three days . Monday the borrow rate was 65.25 % . As Patryn graphed above , correlations are difficult , but this is a huge reduction .
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Post by bill on Dec 3, 2015 16:41:28 GMT -5
Fidelity dropped the borrow rate to 40 % from 53.25 % today . This is the second 10% + borrowing drop in three days . Monday the borrow rate was 65.25 % . As Patryn graphed above , correlations are difficult , but this is a huge reduction . I've occasionally tracked what's going on with Fidelity's rates and though the borrow rate has varied all over, the shares available to short from Fidelity has remained zero. I think that means Fidelity doesn't have shares to borrow, but that they may be able to acquire them from someone--and the borrow rate reflects an estimate of what that might cost them + some additional interest for Fidelity. Lower rates may mean that some shorts have covered. Their covering would free up those shares for borrowing again--perhaps at a lower interest rate. Alternatively, there might be a new player with substantial holdings that is now willing to loan out their shares. My guess is that some shorts have been covering with the share price hovering around $2. That coupled with potential SNY / MNKD good news in the days, weeks, months ahead may be changing the risk / reward equation for at least some of the shorts. Bottom line is that things may be turning in the longs favor, albeit slowly. I think I'll pay daily attention to Fidelity's lending rate. A sustained drop in the borrow rate might be a leading indicator for an improved and sustained improvement in share price and a reduction in short interest.
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