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NorthStar Realty Finance Corp. Message Board

  • newguy7001 newguy7001 Jul 10, 2013 10:46 AM Flag

    Interesting Change At Schwab Regarding 'Available To Short' Data!

    Previously, you could get data on 'Available to Short' shares at Schwab, by calling them. They now are saying that this is proprietary information and will not disclose the information, only saying that there are shares available to short. As of yesterday afternoon I was given a number of 550,000 shares of NRF? I don't know what changed, but, this is very disappointing as a Schwab customer. Dar, Is Fidelity still providing the data? What are the trading costs at Fidelity? Thanks!

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    • Try starting a "sell short" order at Schwab. See what the screen tells you.
      At fidelity, a trade order begins with the symbol. The next drop down box is what kind of trade do you want to trade.When I enter nrf and sell short, the screen tells me how many shares are available to short (which can be zero), whether they are htb and the interest rate, if any. I have seen .25% (on GOOD) and 1.00% the day Fidelity classified 11.5 million nrf shares as htb.

      Every brokerage account (with same account number) has types of accounts within that account. These different types of accounts have different rules.
      Type 1 is a cash account.
      Type 2 is a margin account.
      I think Type 3 is a short account.
      I think Type 4 is an option account.
      I don't know any more, but maybe Type 5 is a commodity account. Perhaps Type 6 is a currency account.

      I believe you have to have a margin account to have a short account because a short position is a liability which gets marked to the ask in real time. When you sell short, you collect cash and have a liability to cover. If the price of the stock goes up, you have a debit balance in the short account because your liability to cover exceeds the cash you collected. I suspect the debit balance in the short account is charged interest, maybe at the margin rate. This short account may also be charged borrowing fees. I know mutual funds and etfs make money lending shares to short sellers.

      But I'm speculating since I have never sold a stock short. I have sold covered calls short. The cash collected reduces the margin debt (or increases cash balance) and the liability to cover the short option is shown is a separate section of fidelity's "balances" page. I am not charged interest when the liability to cover the short call exceeds the premium cash I collected.

      Maybe somebody with short stock experience can give us hard facts.

      • 2 Replies to dar200
      • I have several accounts at Schwab. All but one are cash accounts. I rarely trade in the margin account. Up until today, I was able to get the 'shares available' data by contacting Schwab. I never short shares directly, but, quite often sell covered calls or naked puts. Today when I contacted Schwab to get the shares available information, they would not provide it. I went the next step and called the trading desk people and some person gave me a half as*ed explanation twisted around not revealing information from other peoples accounts. He could not explain why I could get the information yesterday but it was now proprietary today? Also, when you start a 'short' order on the Schwab trading window, there is no information provided regarding available shares. In any case I am disappointed in Schwab's answer. It is frustrating when you know the person you are talking to, doesn't really understand what they are talking about. I was probably trading stocks before the person was born. I will say that 95% of the time the Schwab folks are very knowledgeable and provide excellent insight when an inquiry is made.

      • All I know is you cannot short with a cash only account. So yes, you must have a margin account if you want to short. As previously stated your shares can then be borrowed by the shorts.

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