Carl:
I have just recently started shorting stocks,
Already I like you. Smart, smart move.
and I saw your post about trying to borrow ZITL with no success. I tried to short SEE last Monday, and according to Ameritrade, they couldn't find any shares to borrow.
It happens, especially with "popular" shorts.
As I am just starting at this pursuit, I was only looking to short 100 shares, but apparently they weren't out there to be borrowed. Is this common?
With heavily shorted stocks, yes, it's common. I've found that persistence pays. It took three tries for me to get more shares of EQMDE at my broker one day this week, but I was able to get a lil' more. Got shut out late Friday though. Hadn't realized the stock had already been halted, but that's another story.
Something that's worked for me in the past on hard to borrow stocks is to put in an order just after the close for execution on the open the following day. This appears to put me near the head of the line should any shares come available the next day. You have to watch that closely though cuz you probably don't want to short a stock on the open if it's due to open sharply lower.
I know of someone (opportunity for that someone to chime in <hint><hint>) that trades through Schwab that calls to "reserve" shares for shorting. He gets put on a list and as soon as the shares become available he's able to short them. If he decides he no longer wants to short that stock, no harm, no foul, they move down the list to the next person looking to borrow that stock. Talk to your brokers, see what they say.
Of course, since I couldn't get short, the stock dropped 6 bucks two days later and is now 10 dollars below the bid at the time I was trying to short the stock. :)
Good shorts are slippery, kinda tough to get 'em into the boat. Missed SPLI by that >|< (graphical representation of a really tiny amount) much myself this week.
Thanks for your time, I am learning as I go, and was surprised to not be able to borrow 100 shares of a stock that trades 600k on an average day and is NYSE listed.
If the stock is not heavily shorted then it defies logic that your broker would say "Yes, we have no bananas, we have no bananas today!" on a liquid stock, but dems da breaks. Just keep trying and trying and trying. Sometimes it will take a few days or even a couple of weeks to find enough of what you want and sometimes you'll just never be able to get it. I usually give it a go for a few days but if I can't get in done I just move on to another idea.
P.S. I also have an account at NDB, would it have made any difference to call them and try to short there when Ameritrade was unable to borrow the shares? In other words, do different brokers have access to shares of different stocks?
Yes. Each broker is working off of their own inventory of stocks so if one of your brokers doesn't have something the other could have it so use both. Keep in mind that the inventory is a moving target too. What they have today they might not have tomorrow and vice versa.
I happen to use an online discounter. One of the things they will not do for me is go out on the Street in search of shares of stocks that I want to borrow but they do not have in inventory. I'm under the impression that that is only done at institutional brokers for the big boys and girls but you might want to ask your brokers if they will do that for you.
Thanks again.
De nada, as my wife would say. John runs a great thread here, lots of good shorting ideas passing through this space. Come back and see us again. For future reference basic shorting questions should be posted on John's "Shorting Stocks - Mechanical Aspects" thread at
exchange2000.com
Now go out there and short something!
drakes353 |
