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Strategies & Market Trends : Shorting stocks: Mechanical aspects
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To: David Penfield who wrote (134)9/10/1998 4:03:00 PM
From: Q.  Read Replies (1) of 172
 
David, usually a discount broker will find shares for you only if they are available with its own clearing firm. So the clearing firm makes a bigger difference than the actual broker.

There's nothing to stop the broker from calling around elsewhere to find shares, but usually they can't be bothered.

One exception is Yamner Securities, which is a discount brokerage that works by phone only. They will phone around to borrow shares. A heavy trader who writes for thestreet.com did a real money test comparing Yamner and Schwab, and found that Yamner could find shares more often, because the brokers there really work the phones. Info at www.yamner.com Their head trader has a thread here on SI where you can inquire, too. Search for 'the trading desk'.

Months ago many short sellers switched to Datek because of anecdotal evidence that they could find shares for almost anything. More recently short sellers have reported more trouble with them. Why their clearing firm was better, or whether Datek just fudged and didn't really borrow, I don't know.

Many short sellers have more than one broker, as a solution to help with the borrow problem. There's nothing wrong with doing this. It's what I do. Make sure the two brokers have different clearing firms, though.
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