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I know when you buy stock on margin you need to pay a interest rate for example with IB a rate + benchmark rate. How expensive is shorting a stock long term, is it a similar fee as buying on margin e.g. rate + benchmark rate or is it more expensive?

The stock I'm thinking about is GME. How long would it cost to hold short a stock like this long term?

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    My broker will not let me short GME for obvious reasons - it is too risky. There is a not insignificant risk that I could end up owing the broker a zillion dollars.
    – user253751
    Mar 16 at 23:02
  • @user253751 that probably true a year ago but I dont think the stock itself has that kind of volitility now
    – Lightsout
    Mar 17 at 21:02

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When you short a stock, you pay a daily borrow fee (including weekends) for every day that you are short plus the two days for T+2 settlement.

The borrow rate can fluctuate daily. It can range from 0.25% for a stodgy large cap stock to 100s of a percent a year. I have seen a few with a borrow rate of 1,000%. The fees accrue daily and IBKR deducts the total from your account at the beginning of each month.

I can't tell you how long it would cost to hold a short position in GME because my platform is off and I don't know what the borrow rate is. If you are with IBKR, their platform supplies this info.

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  • I havnt checked my monthly fee yet
    – Lightsout
    Mar 17 at 20:21

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