BROWSE

Hard-To-Borrow List

What is a Hard-To-Borrow List

A hard to borrow list is inventory utilized by brokerages to identify securities that are not available for borrowing for transactions that are short-sale. The hard-to-borrow list of a brokerage firm gives an up-to-date list of securities which one cannot short. The security may be on the hard-to-borrow list because it is in short supply or because of its volatility. In order to enter a short sale, a brokerage client must first borrow the shares from the broker. To provide the shares, the broker can use its own inventory or borrow from the margin account of another client or from another brokerage firm.

Explaining 'Hard-To-Borrow List'

Investors who enter short sale transactions attempt to capture profits in a declining market. For example, an investor may think that stock ABC will drop in price in the future. The investor can short stock ABC and, if the price drops as he or she anticipated, buy to cover for a profit. If the stock rises, however, the investor will lose money. The hard-to-borrow list is updated on a daily basis. In order to enter a short transaction, the broker must be able to provide, or locate, the shares to loan to the brokerage client making the short sale. Regulation SHO, implemented on Jan. 3, 2005, has a "ocate"condition that requires broker to have a reasonable belief that the equity to be shorted can be borrowed and delivered to a short seller. The regulation is intended to prevent naked short selling practices. While a brokerage firm's hard-to-borrow list is typically an internal list (and one that is not available to clients), the firm' clients generally have access to the easy-to-borrow list. Brokerage clients may have to pay hard-to-borrow fees on certain short sales. The hard-to-borrow list is the opposite of the easy-to-borrow list which is an inventory of securities that are available for short sale transactions. In general, an investor can assume that a security that is not included on the hard-to-borrow list will be available for the purposes of short selling.

Further Reading


Failure is an option: Impediments to short selling and options prices academic.oup.com [PDF] … short sell or whose stock is sold short.1 The interest is both in the economics of clearing … Specialness is zero for most stocks, and it is positive for specials, or hard-to-borrow stocks … index, and we have limited our other databases to the Russell 3000 using constitution lists from the …
Connecting two markets: An equilibrium framework for shorts, longs, and stock loansConnecting two markets: An equilibrium framework for shorts, longs, and stock loans www.sciencedirect.com [PDF] … short sell or whose stock is sold short.1 The interest is both in the economics of clearing … Specialness is zero for most stocks, and it is positive for specials, or hard-to-borrow stocks … index, and we have limited our other databases to the Russell 3000 using constitution lists from the …
Stocks are special too: An analysis of the equity lending marketStocks are special too: An analysis of the equity lending market www.sciencedirect.com [PDF] … short sell or whose stock is sold short.1 The interest is both in the economics of clearing … Specialness is zero for most stocks, and it is positive for specials, or hard-to-borrow stocks … index, and we have limited our other databases to the Russell 3000 using constitution lists from the …
Anomalies: The law of one price in financial marketsAnomalies: The law of one price in financial markets www.aeaweb.org [PDF] … short sell or whose stock is sold short.1 The interest is both in the economics of clearing … Specialness is zero for most stocks, and it is positive for specials, or hard-to-borrow stocks … index, and we have limited our other databases to the Russell 3000 using constitution lists from the …
Transcending the impact of the financial crisis in the United Kingdom: towards plan F—a feminist economic strategyTranscending the impact of the financial crisis in the United Kingdom: towards plan F—a feminist economic strategy journals.sagepub.com [PDF] … short sell or whose stock is sold short.1 The interest is both in the economics of clearing … Specialness is zero for most stocks, and it is positive for specials, or hard-to-borrow stocks … index, and we have limited our other databases to the Russell 3000 using constitution lists from the …
Naked short selling and market returnsNaked short selling and market returns jpm.pm-research.com [PDF] … short sell or whose stock is sold short.1 The interest is both in the economics of clearing … Specialness is zero for most stocks, and it is positive for specials, or hard-to-borrow stocks … index, and we have limited our other databases to the Russell 3000 using constitution lists from the …
The big, bad wolf and the rational market: portfolio insurance, the 1987 crash and the performativity of economicsThe big, bad wolf and the rational market: portfolio insurance, the 1987 crash and the performativity of economics www.tandfonline.com [PDF] … short sell or whose stock is sold short.1 The interest is both in the economics of clearing … Specialness is zero for most stocks, and it is positive for specials, or hard-to-borrow stocks … index, and we have limited our other databases to the Russell 3000 using constitution lists from the …
Stochastic Pricing Dynamics of Hard-to-Borrow StocksStochastic Pricing Dynamics of Hard-to-Borrow Stocks papers.ssrn.com [PDF] … short sell or whose stock is sold short.1 The interest is both in the economics of clearing … Specialness is zero for most stocks, and it is positive for specials, or hard-to-borrow stocks … index, and we have limited our other databases to the Russell 3000 using constitution lists from the …


Q&A About Hard-To-Borrow List


Who created the SEC's Short Sales Rule?

The SEC created this rule.

Is there any way I can get my hands on some hard-to-borrow securities without having to pay high prices for them?

Yes, there is! If you know someone who already owns one, ask them if they would sell it back to you at a lower price than what's listed on the hard-to-borrow security marketplaces like those offered by banks and brokerage firms!

What is the Hard-to-Borrow List?

The Hard-to-Borrow list is a list of securities that are hard to borrow.

Where can you find this list?

You can find this list at your local Federal Reserve Bank or online through their website.

What does Hard-To-Borrow List refer to?

The Hard To Borrow List refers to a list of bonds that are difficult to borrow.

What kind of information can be found on this Hard To Borrow List?

You can find out more information about what kinds of bonds are listed as well as how much they cost when you search for them online or visit your local Federal Reserve Bank.

Who maintains this list?

The Federal Reserve Bank maintains this list.

Why might a security be on the Hard-to-Borrow List?

A security may be on the Hard-to-Borrow List because it has high volatility or something else.

When was this rule created?

This rule was created in 221.

How often do they update their lists?

They update their lists every day with new data on what has been borrowed recently and how much it costs per bond if you want to buy one from someone else besides yourself or your bank.

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