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Borrow/Loan Transactions

You can borrow and lend shares directly from the data line.

To borrow, click the Lend or Auction Lend field.
To lend, click the Borrow or Auction Borrow field.

Borrowing Shares

Borrow requests are eligible to fill in either the continuous or auction market, based on price.

If you initiate a borrow by clicking the Auction Lend field, the limit price reflects the current best Lend rate.
If you initiate a borrow by clicking the Lend field, the limit price defaults to the last auction price.

You can modify the transaction type on the order line using the Borrow/Lend drop-down in the Action field.

Continuous trading runs throughout the day, stopping for 5 minutes prior to each 1 minute auction. If your transaction does not fill during continuous trading, it will be held and entered in the next auction.

The Borrow Rate and Interest Rate

The borrow rate differs by symbol based on how difficult a stock is to borrow. The harder a stock is to borrow, the higher the borrow rate. The borrow rate includes the interest rate which is the same for all symbols and is equal to the day’s opening Fed Funds rate. Shares are considered “easy-to-borrow” if a reasonable assurance can be made at trade date that the shares will be available for borrowing on settlement date. Oftentimes the borrow rate on such shares is equal to or less than 0.00.

There is a collateral minimum of 200k to borrow easy-to-borrow shares. This minimum is in effect from the market’s open at 6:45 am up until 11:00 am.

The collateral amount is the price per share of the underlying x quantity. The borrow rate is applied to the collateral amount to calculate the daily IB Carry Charge that the borrower will pay for the privilege of borrowing the stock. The collateral represents the cash put up by the borrower to cover the borrow transaction, and is the underlying stock price times the quantity of the borrow transaction. The collateral is returned to the borrower when the shares are returned to the lender.

The daily IB Carry Charge is:

Quantity x Stock Price x Borrow Fee/360

For example, if you are borrowing 500 shares of a $20.00 stock with a borrow fee of 0.38, the daily IB Carry Charge on the transaction is:

500 x $20.00 x .0038/360 = 0.18*

To see the total rate, which is the interest rate - borrow fee, hold your mouse over a rate field.

*The IB Carry Charge is subject to minimum/maximum amounts as described on the AQS Commissions page on the IB web site.

Preview Orders

Before you transmit the order, right-click and select Preview Order/Margin. The Order Description box shows the order parameters, and displays the amount that will settle, calculated as 102% * mark price, rounded up to the nearest $1, with a minimum of $1.

Note: This preview is a current projection only and is subject to change.

Borrow Limits

You can borrow up to the amount you would be eligible to short based on the Net Liquidation Value in your account.

Lending Shares

To lend shares, you must own the shares (they cannot be long on margin) and the DTC must be holding them. The quantity of shares available to lend is shown in the Loanable Quantity field.

If you initiate a lend order by clicking the Auction Borrow field, the value in your order reflects the current best Borrow rate.
If you create a lend order by clicking the Borrow field, the rate defaults to the auction equilibrium rate.

You can manually modify the rate at which you want to lend directly in the order line.