An extra charge when too many people are short
When there are not enough shares to lend, the cost of finding them is passed to the short sellers. It accrues by the day and there is no ceiling known in advance. On crowded shorts it can decide whether the trade makes money at all.
A borrow fee of $5 a share a day for 10 days costs $5,000 on 100 shares.
For learning, not investment advice. Decisions are your own.
StockFit · TrueNorthLabs Inc.