Jack asked in Business & FinanceInvesting · 1 month ago

What are the best brokers for hard to borrow stocks to short?

I currently use Interactive Brokers (also have smaller accounts with TDAmeritrade and Firstrade).  TDAmeritrade and Firstrade are virtually worthless unless the company is large with a huge number of shares.

IB is good, but orders often come up with no shares available and that they'll attempt to locate.  Sometimes they do locate later.

I've been looking at alternatives for the times when IB doesn't have borrows.  I actually would give TradeZero a go, but since I'm American it is a no go from the start.

I've heard negatives about SureTrader (call your shorts for no reason, change margin ratios, poor customer service etc...) so I'll stay away from them.

I thought about opening Charles Schwab, Etrade and/or Ally accounts...but I think it will be about the same as TDA.

Center Point and Speed Trader seem like viable options, but it is hard to tell from the outside what they actually have, fees and how it works.  Any input is appreciated.

Also considering Light Speed....they have a new locate feature.

I'm probably missing a lot, so any advice would be greatly appreciated.  

PS.  I am mostly paper trading at this point, won't go live until I have this sort of thing figured out...and even then it will start very very conservatively...so all the comments about how I should get more experience, I'm going to lose money etc. are off topic.

3 Answers

  • 1 month ago

    There's a big difference between paper trading and trading in the real world. You learn more from trading in the markets than you can do in make believe.

    The best brokerage firms to borrow stocks is through the bigger firm, the bigger the better, not discounters. Customers DON'T borrow for short sales, it's the brokerage firm that does the borrowing and most lender want to deal with the big guy.

    Source(s): 45+ years in senior management on the street
    • A nobody
      Lv 7
      1 month agoReport

      Any larger NYSE firm - There's no such thing as "shorts available" - there's stocks available for lending and they're held by large firms or clearing firms.  Available stock for lending come from margin accounts or form accounts who agree to lend stock.

  • Anonymous
    1 month ago

    Paper trading isnt the same no matter whether you think it is or not. Its much easier making big trades when you know it isnt real money, because that one big loss is going to feel MUCH different.

    • Jack1 month agoReport

      Of course. I just noted that is the stage I am in now. I can double my money every month on marketwatch....but it doesnt consider liquidity or the availability of shorts. The emotions are obviously also much different.

      But this didnt answer my question in any way

  • Anonymous
    1 month ago

    You're using discount brokers.

    If you want to short hard to borrow stocks, try a full service broker and expect to pay more.

    • Jack1 month agoReport

      Where are they getting the stocks from?

Still have questions? Get your answers by asking now.