IB borrow rate update

[LosingMyBullishness]

Borrow rate at IB has gone up to whoopy 168%, this is the highest value in the last 2 years! It was at 25% in Jan 16. Last big pike was around  Nov 14th at about 150%, which I assume was due to TASE.

[dreamboatcruise]

I feel sorry for the shorts... NOT!

[kc]

Wish I could check the Fidelity borrow rate. I am driving so I don't have access to my computer to do that right now.

[goyocafe]

Mar 16, 2016 15:50:47 GMT -5 kc said:

Wish I could check the Fidelity borrow rate. I am driving so I don't have access to my computer to do that right now.

As of 4:55 EDT, Fidelity has not changed. Still at 45% paid to lender.

[kc]

Mar 16, 2016 15:56:24 GMT -5 goyocafe said:

Mar 16, 2016 15:50:47 GMT -5 kc said:

Wish I could check the Fidelity borrow rate. I am driving so I don't have access to my computer to do that right now.

As of 4:55 EDT, Fidelity has not changed. Still at 45% paid to lender.

That is the rate to us as lenders. They had been charging 67.75% to the borrower

[petech]

Interesting.  On 1/16 the fidelity rate (to borrower) was 18%.  As IB pays 50% of interest to the lender, then you would have received 12.5% at IB.

So it sounds like during "spike" periods (such as the one we are in), IB beats Fidelity hands down...but "normal" times....Fidelity is better.

[LosingMyBullishness]

Mar 16, 2016 16:19:36 GMT -5 petech said:

Interesting.  On 1/16 the fidelity rate (to borrower) was 18%.  As IB pays 50% of interest to the lender, then you would have received 12.5% at IB.

So it sounds like during "spike" periods (such as the one we are in), IB beats Fidelity hands down...but "normal" times....Fidelity is better.

12.5? Educate me: I thought 168/2 is 84℅ to the lender.

[anderson]

Mar 16, 2016 16:37:18 GMT -5 LosingMyBullishness said:

Mar 16, 2016 16:19:36 GMT -5 petech said:

Interesting.  On 1/16 the fidelity rate (to borrower) was 18%.  As IB pays 50% of interest to the lender, then you would have received 12.5% at IB.

So it sounds like during "spike" periods (such as the one we are in), IB beats Fidelity hands down...but "normal" times....Fidelity is better.

12.5? Educate me: I thought 168/2 is 84℅ to the lender.

Please reread petech's post.  So yes 168/2 is 84℅.  He was talking about past rates and how Fidelity is slow and steady and IB is stop and go.  So most of the time Fidelity will beat IB, excepts in times of a spikes where Fidelity does not adjust as quickly as IB.   

[LosingMyBullishness]

Mar 16, 2016 19:59:24 GMT -5 anderson said:

Mar 16, 2016 16:37:18 GMT -5 LosingMyBullishness said:

12.5? Educate me: I thought 168/2 is 84℅ to the lender.

Please reread petech's post.  So yes 168/2 is 84℅.  He was talking about past rates and how Fidelity is slow and steady and IB is stop and go.  So most of the time Fidelity will beat IB, excepts in times of a spikes where Fidelity does not adjust as quickly as IB.   

Thanks. Indeed he mentioned Jan. So where is fidelity right now?

[LosingMyBullishness]

Mar 16, 2016 19:59:24 GMT -5 anderson said:

Mar 16, 2016 16:37:18 GMT -5 LosingMyBullishness said:

12.5? Educate me: I thought 168/2 is 84℅ to the lender.

Please reread petech's post.  So yes 168/2 is 84℅.  He was talking about past rates and how Fidelity is slow and steady and IB is stop and go.  So most of the time Fidelity will beat IB, excepts in times of a spikes where Fidelity does not adjust as quickly as IB.   

What I find most peculiar is 'why'. The stock is slowly moving higher, but well under control. The costs for real borrowed stock is moving up without news. So there is some pressure. I do not know where the limit is with the amount of FTD shares. Is this the problem? Eight now $3 to borrow stock seems okay but it looks as if we get to $2 before April. If the rate to borrow is 250% then some late shorts might get into trouble.

[dreamboatcruise]

Mar 16, 2016 20:19:19 GMT -5 LosingMyBullishness said:

Mar 16, 2016 19:59:24 GMT -5 anderson said:

Please reread petech's post.  So yes 168/2 is 84℅.  He was talking about past rates and how Fidelity is slow and steady and IB is stop and go.  So most of the time Fidelity will beat IB, excepts in times of a spikes where Fidelity does not adjust as quickly as IB.   

What I find most peculiar is 'why'. The stock is slowly moving higher, but well under control. The costs for real borrowed stock is moving up without news. So there is some pressure. I do not know where the limit is with the amount of FTD shares. Is this the problem? Eight now $3 to borrow stock seems okay but it looks as if we get to $2 before April. If the rate to borrow is 250% then some late shorts might get into trouble.

FTD might blunt the rise in charged interest over a very short time period, such as a day or two, but we often see inflated borrow rates last for some time... longer than people could fail to deliver.

[petech]

Spot on, Anderson.  That's exactly what I was saying and where I was leading in my conclusion.

The other thing I found out is that IB pays their interest daily...rather than Fidelity waiting the full month...and then a couple days.

That said, my goal was always to lend to shorts until such point at which I saw the price start a climb up...and then pull my shares out.  So I will revisit this question in the future.

[BlueCat]

Mar 17, 2016 10:26:53 GMT -5 petech said:

Spot on, Anderson.  That's exactly what I was saying and where I was leading in my conclusion.

The other thing I found out is that IB pays their interest daily...rather than Fidelity waiting the full month...and then a couple days.

That said, my goal was always to lend to shorts until such point at which I saw the price start a climb up...and then pull my shares out.  So I will revisit this question in the future.

Petech - interesting strategy.  I've been on the 'no lending' side (tho tempted).  However, the idea to strategically pull the shares at exactly the right time (with intent to help the other side of the manip coin) - is a compelling idea.

[petech]

Why thank you.  The full strategy involves buying shares/call options with the income.  While some of the option purchases weren't great (expired worthless); the more recent purchases are on fire.

Manipulation can work both ways.  You sell guns to your enemies people question your motives.  You stop selling those guns when the enemy needs them most, perhaps your motives are clear now.

[kc]

Mar 17, 2016 10:26:53 GMT -5 petech said:

Spot on, Anderson.  That's exactly what I was saying and where I was leading in my conclusion.

The other thing I found out is that IB pays their interest daily...rather than Fidelity waiting the full month...and then a couple days.

That said, my goal was always to lend to shorts until such point at which I saw the price start a climb up...and then pull my shares out.  So I will revisit this question in the future.

I really don't think that us retail longs would move the needle on the short lending table. How many shares do you think the retail long represents in the lending program? My guess is less than 10% of the total shares being lent out.