Borrow Fees & Hard-to-Borrow Stocks

The cost of borrowing shares ranges from almost nothing to more than the stock could reasonably fall. Here is how borrow fees work, what makes a stock hard to borrow and how fees can sink a short even when you are right.

Easy vs. hard to borrow

Large, widely held stocks are usually easy to borrow at low yearly rates. When many traders want to short a stock and few shares are available to lend, it becomes hard to borrow and fees rise, sometimes to 50% or even more than 100% a year. Fees can change daily.

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