On trade date, it's all about availability. Our depth of availability not only helps to locate hard-to-borrow securities but also gives you protection against buy-ins and recalls.
IB gives clients two ways to view available shares for shorting in real time:
Our securities financing services bring transparency, reliability and efficiency to the stock loan and borrow markets using automated price discovery and improved credit-worthiness. Our stock loan and borrow rates are very competitive. We use the best market data available to measure ourselves. We use a combination of sources to develop indicative rates, which are displayed along with security availability in our automated securities financing tools.
We also display charted daily rate history and intraday time and sales of stock loan fees in the SLB Rates window, which is accessible in Trader Workstation's Mosaic workspace.
At Interactive Brokers, global reach starts with our breadth of product offering and extends to our securities financing services. Connectivity to multiple counterparties around the globe enables our clients to execute short sale strategies. In the United States alone we have access to more than 60 counterparties, including agent lenders and broker dealers.
Our global reach doesn't stop there. We maintain dedicated, professionally-staffed SLB desks in the United States, Europe and Asia who are ready to help you with all of your securities financing needs, including stock loan and borrow questions.
IB has always provided sophisticated, automated technology to our clients, and our securities lending services are no exception. We offer a variety of stock loan and borrow tools:
Earn extra income on the fully-paid shares of stock held in your account by joining IB's Stock Yield Enhancement Program. This plan allows IB to borrow shares from you in exchange for cash collateral, and then lend the shares to traders who want to sell them short and are willing to pay interest to borrow them. Each day that your stock is on loan, you will be paid interest on the cash collateral posted to your account for the loan based on market rates.
IB pays you 50% of the income it earns from lending the shares.
The program is available to eligible IB clients1 who have been approved for a margin account, or who have a cash account with equity greater than 50,000 USD.
IB manages all aspects of share lending. Once you enroll, IB will examine your fully-paid stock portfolio automatically. If you have stocks that are attractive in the securities lending market, IB will borrow the stocks from you, deposit collateral into your account and lend the shares. It's that simple.
When your stock is loaned out, you will see the interest rate that you are being paid on the cash collateral along with the amounts earned by IB from lending those shares. Other brokers with similar programs generally do not disclose the market rates to you, which allows them to pay you a small piece of the pie while holding on to most of the profits.
Each day that your stock is on loan, IB pays interest on the cash collateral directly into your account.
You will see the loaned shares on your account statement, indicating that they are being loaned out. You are still the owner of the stock, which means you continue to have market risk and will recognize any profit (or any loss) if the stock price moves. You can sell your shares at any time without any restriction. You can terminate your participation at any time for any reason.
XYZ is currently trading at $75.00/share. You're long 5000 shares of XYZ, with a market value of $375,000.00. XYZ is in demand and commands a loan interest rate of 9%.
You Could Earn $16,875.00/year on Stock You Already Own
You sign up for IB's Stock Yield Enhancement Program, and IB loans out your 5000 shares of XYZ at 9%. IB will pay interest on your cash collateral of $375,000 x 4.5% = $16,875.00.
The Stock Yield Enhancement Program is available to eligible IB clients1 who have been approved for a margin account, or who have a cash account with equity greater than 50,000 USD.
Stocks that are eligible to be loaned out are all "fully-paid" stocks (stocks not held on margin) and "excess-margin" stocks (stocks held on margin but whose market value exceeds 140% of your margin debit balance).
The Short Stock Availability Tool, part of Interactive Brokers' Stock Borrow Loan system, is a fully electronic, self-service utility that lets you search for availability of shortable stocks. The data is updated periodically throughout the day.
The list of shortable stocks is indicative only and is subject to change. IB does not accept short sale orders for US stocks that are not eligible for DTC continuous net settlement (CNS) and all short sale orders are subject to approval by IB.
The Short Stock Availability Tool, easily accessible from our Account Management system, lets you:
The Yield Optimizer, included with Trader Workstation, lets you compare securities financing rates across the current SLB market, and One Chicago's single stock futures market. Use different borrow strategies, view the best rates for lending your own shares and see the most cost-effective EFPs for investing your excess cash.
For more information, see our Yield Optimizer page.
Clients with Portfolio Margin accounts can join our Pre-Borrow Program, which allows pre-borrowing of shares to decrease the chances of being bought-in on settlement date. Once you have joined the Pre-Borrow Program, you can pre-borrow stocks in anticipation of a short sale using the Stock Borrow/Loan feature in TWS. Pre-borrowing can help to avoid a buy-in by ensuring that shares are available to short before you put on the short sale. Without a pre-borrow, you will not know for certain if shares have been procured until the short sale settles.
The list of shortable stocks is indicative only and is subject to change. IB does not accept short sale orders for US stocks that are not eligible for DTC continuous net settlement (CNS) and all short sale orders are subject to approval by IB."
The Availability List for bonds is indicative only and is subject to change. All short sale orders are subject to approval by IB.
IB clients who only execute through IB, but do not use IB as their clearing broker or custody agent ("Non-Clearing Customer"), may click here for a list of valid Market Participant Identifier (MPID) codes to be entered with their short sale orders.
We do not allow short-sale orders for less than 1 round lot (100 shares in US/Canada).