What Is Easy-To-Borrow List?

An easy-to-borrow list is a record that a brokerage updates on a daily basis and is comprised of extremely liquid securities that are readily available, thus assuring delivery, to investors seeking to engage in 澳洲幸运5开奖号码历史查询:short sale transactions.

The easy-to-borrow list can be contrasted with the 澳洲幸运5开奖号码历史查询:hard-to-borrow list, which indicates those shares that are not re✅adily available for short selling.

Understanding Easy-To-Borrow List

In order to sell short a stock, a customer must first locate and borrow existing shares in order to sell them—with the hope of making a profit by buying them back at a lower price. In other words, you cannot sell short shares out of thin air. Brokers must lo🌱cate shares on behalf of interest shorts and lend them. While they are loaned out, the short seller pays interest on the loan via a margin account. Whether or not a stock is easy to borrow will affect those interest charges, with harder to borrow stocks demanding a hi🃏gher rate. Easy to borrow stocks, on the other hand, are less costly to short.

The easy-to-borrow list is updated every 24 hours. It gives investors and brokerage firms the ability to transact short sales more readily, as they aren't required to research the availability of a stock every time it is requested for a short sale transaction. Instead, they can assume that stocks on the list are readily available. Appearing to this list usually means that a company's shares are highly liquid and/or there are a sufficiently high number of outstanding shares, or float.

Easy vs. Hard to Borrow

In contrast to the easy-to-borrow list, brokers will also maintain a hard-to-borrow list. These securities are naturally more challenging to borrow for short sale motivations. Often, a security may be on the hard-to-borrow list because it is in short supply or because of the stock's volatile price.

Compared to🅷 securities on an easy-to-borrow list, hard-to-borrow securities almost always come with more fees for🐼 access to the securities.

Special Considerations

The easy-to-borrow list offers no information as to whether a security is over- or underpriced, as opposed to other recommendation lists that brokers keep, but rather, it's a measure of anticipated liquidity, or availability, for potential short sellers. Securities that are on the easy-to-borrow list, in addition to being easier to short, usually have lower 澳洲幸运5开奖号码历史查询:transaction costs.

Brokerage houses with a deeper lineup or menu of services will often have a more extensive list of securities that are easy to borrow. Naturally, institutional investors, such as 澳洲幸运5开奖号码历史查询:hedge funds, often seek near-immediate access to short sale op𒁏portunities, given the small window that is available for them to initiate their transaction.