Days to cover measures the expected number of days needed to close out a company's shares outstanding that have been shorted. Your continued use of this site implies agreement with our terms and conditions, which may be revised from time to time. It's a measure of short interest in a stock. This can result in a sharp drop in the securitys price when the bubble bursts. Access your favorite topics in a personalized feed while you're on the go. Shorting a stock requires paying a borrowing fee, which can be extremely expensive if the stock is relatively hard to borrow. In addition to Canopy Growth, four other cannabis companies are on the most expensive shorts list Tilray, Hexo, Aurora Cannabis, and Aphria. What Are the Risks Involved With Short Selling? When investing in the stock market, there are many strategies that traders and investors can use to try to profit from the ups and downs of individual stocks. Clover Health Investments Corp - 35.23%. After being involved in the industry since 2019, he is now a strong supporter of decentralized technologies and a fair stock market. The borrow rate is usually expressed as a percentage of the loan amount. If a stock has a short interest ratio of 10%, then it means that for every 10 outstanding shares, one is held as a short. 326 E 8th St #105, Sioux Falls, SD 57103 Real-time analyst ratings, insider transactions, earnings data, and more. A trailing buy stop order, on the other hand, adjusts the trigger price for taking profits as the stock price moves lower. Traders who are considering short-selling a stock should carefully consider these fees when determining the risk/reward ratio of their trades to avoid any unexpected surprises. 2, Unsualinvestor After all, a short seller could end up profiting from the woes of a company even while company stockholders and employees livelihoods are being destroyed. It's likely that the stock's borrow fee could climb even higher, Dusaniwsky said. It depends on the individual security and the lending institutions involved. "New stock borrows are going at over 400% fee today as there are very few shares left to borrow. Regardless of the amount of profit, if any, the borrower earns from the short sale, the agreed-upon fees to the lending brokerage are due once the agreement period has ended. When you borrow money, the interest rate is the price you pay for the use of someone elses money. The fake meat company has been on a steady decline since its initial public offering (IPO) in 2019. And when the short shares available gets to zero, well, lots of interesting things can happen. Ontrak Inc (NASDAQ: OTRK) assists those who have unresolved health conditions that lead to serious medical problems. When the interest rate on borrowed money increases, it can have a ripple effect throughout the economy. A stock is said to be hard-to-borrow when the number of buyers who want to short the stock outnumbers the number of sellers who want to borrow the stock. 2021 Benzinga.com. View More Analyst Ratings for BYND View the Latest Analyst Ratings, Cannabis Short Sellers Up Another 0M In November. This is used to measure whether or not there is bullishness in the market, as it reflects the level of demand for a particular security. The higher the borrow rate, the more expensive it becomes to short the stock, and the lower the potential profits from the trade. HTB How to Use the MarketBeat Short Interest Tracker. One of the primary risks is the possibility of unlimited losses. View the latest news, buy/sell ratings, SEC filings and insider transactions for your stocks. This is where the chance to make money on this information comes in. The standard margin requirement is 150%, which means one must set aside 50% of the value of the stock at the time of borrowing in that account. However, short selling is a complex and potentially risky strategy, and one aspect that traders need to be aware of when considering a short trade is the borrow rate of the stock. Here are the top 13 stocks with the most expensive borrow fees, ranked from least to most expensive according to S3 data. See what's happening in the market right now with MarketBeat's real-time news feed. Ballard Power Systems Inc (NASDAQ: BLDP), 49.2% borrow fee. Heres a list of the 12 stocks with the highest stock borrow rates (minimum $50 million short interest), according to S3. View which stocks are hot on social media with MarketBeat's trending stocks report. See Also: Stock Borrow Costs: A Short Seller's Worst Enemy. With that in mind, lets take a look at the highest borrow fees for the top five stocks with short interest over $100 million as of Dec. 30: Beyond Meat: 102.57%. Unsualinvestor However, a rate of 1% or higher is generally considered high. Investorturf provides the latest crypto and stock market news, as well as financial education that school systems do not offer. (844) 978-6257. Beyond Meat Inc (NASDAQ: BYND ), 115.1% fee. Join our subscribers list to get the latest news, updates and special offers directly in your inbox. Flexible workspace company WeWork, Inc. (NYSE: WE) went public through a reverse merger with a special purpose acquisition company (SPAC) called BowX Acquisiti. CNBC notes that CVNA had a staggering short gain of 377.6%. The borrow rate is an important metric to watch for investors, as it can indicate whether a company is able to borrow money at a low interest rate or not. 2023 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Investors can use the pull-down menus to screen for specific stocks based on categories such as stock sectors, market capitalization, investor sentiment, and analyst sentiment. However, that is not a complete and fair view of the job of a short seller. Get 30 Days of MarketBeat All Access Free, Sign in to your free account to enjoy these benefits. It is also worth noting that implied borrowing costs are not the only factor to consider when assessing the riskiness of a security. WebThe HTB rate shown is an annualized rate. This can result in additional losses, as the short seller must buy the shares at a higher price than they sold them for. High interest rates make it more difficult or expensive to borrow money. "Short" shares can also serve as a hedge for investors that have purchased a large number of shares of a company thinking that the share price will rise over time. A high borrow rate can be a sign of financial distress for a company and may indicate that the company is not able to borrow money at a reasonable price. NUZE stock recently climbed from a low of $1.95 to a high of $7.60 before settling down at $3.75 last week. Theres even room for more lines. The degree of short interest, therefore, provides an indication of the stock loan fee amount. This page lists stocks that currently have the highest levels of short interest. It is generally not considered to be a good thing for a stock to be hard-to-borrow. Free Theme By. Frontier Communications Corp (NASDAQ: FTR), Short Sellers Double Down On Twilio Following Rally, Why A Beyond Meat Short Squeeze May Be 'Just Around The Corner', View More Analyst Ratings for BYND View the Latest Analyst Ratings, Why Slack's IPO Investor Sentiment Might Be A Good Omen, Beyond Meat Taking A Bite Out Of Short Sellers. Autozone Or Advance Youve Got A Winner With Auto Parts, Lucira Stock Jumps over 250% on FDA Approval, Beware Chapter 11. All rights reserved. He calls his broker and asks the broker to find him 100 shares of the company to borrow for a short sale. Financial Market Data powered by FinancialContent Services, Inc. All rights reserved. Short sellers are then forced to buy stock to cover their positions, resulting in an uptick in buying volume and therefore a higher price for the stock. If it is high, it might be a sign that the stock is in danger of going down in price. The borrow rate is usually expressed as a percentage of the loan Fees can be hundreds of thousands or even millions of dollars each day. Consumer Discretionary, Automotive, Electric Vehicles, Consumer Staples, Food, Retail, Technology. Eddie Pan specializes in institutional investments and insider activity. Nothing on this site is meant to be a recommendation to buy or sell securities nor an offer to buy or sell securities. Once a short position is triggered in a stock, implementing a kind of protection on the order is ideal. A high borrow rate for a stock is a warning sign that the demand to short sell that stock is high. Interest rates would likely rise, increasing borrowing costs for U.S. consumers, businesses, and taxpayers, who would pay more to service current and future debt. Short sellers borrow shares of stocks they dont own and try to sell them at the current price with the aim of rebuying them once the price drops significantly. S3 Partners analyst Ihor Dusaniwsky recently said stock lending is a market based on simply supply-demand economics, meaning stocks that are in high demand among short sellers can see borrow fees spike quickly. This is a difficult question to answer definitively as borrow rates can vary greatly depending on the particular security in question and the lending institutions involved. Copyright Short selling also provides a form of defense against financial fraud by bringing to light companies that have tried to inflate their performance and valuation. As short sellers immediately sell the borrowed stock, the borrower must reassure the lender by putting up collateralsuch ascash, treasuries, or a letter of credit from a U.S. bank. Be sure to ask the lender what the rate is and how its calculated. This is when an investor believes that the stock is going to go down in price and they want to profit from that. OnTrak combines evidence-based psychosocial and medical therapies, which are administered in-person or by telehealth. He writes for InvestorPlaces Todays Market team, which centers on the latest news involving popular stocks. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem. All rights reserved. Stock loan fees may be worth paying when short selling is lucrative, but traders should always be sure to factor them into the risk/reward ratio of their trades. For example, if one wishes to short sell 100 shares of a company going for $10 a share, one will need about $500 in a margin account. Nasdaq Her expertise is in personal finance and investing, and real estate. Borrow fees can be detrimental to traders betting against costly stocks. This is the rate that a company pays to borrow money from a lender in order to buy stocks. For example, if a company borrows $1,000,000 at a 6% interest rate, they will have to pay $60,000 in interest over the course of one year. While the shares are being borrowed, the short seller must pay interest and other charges on the loaned shares. When a stock has a high borrow rate, it can mean one of two things. WebThis leaderboard shows a list of companies with the highest/lowest Short Borrow Rate. Thats because these penny stocks are frequently the playground for scam artists and market manipulators. As of Dec. 30, the information technology sector was the most-shorted sector based on dollar terms, with total short interest of $166.03 billion. Brokers often split the borrowing fees with the lenders. Feb 17, 2022 First, it could indicate that investors are bullish on the stock's future performance, meaning that they expect the stock's price to rise. High Short Interest Stocks HighShortInterest.com provides a convenient sorted database of stocks which have a short interest of over 20 percent. There is no definitive answer as to what constitutes a high short borrow fee rate. Currently, they are concentrating on the development of electric-powered delivery and utility vehicles. Get short term trading ideas from the MarketBeat Idea Engine. Unlike an investor who holds stocks for their value and the income they produce, traders capitalize on an anticipated decline in price by trying to sell high and buying low. Feb 23, 2022 Such funds try to hedge the market by short selling stocks they believe are overvalued. Short borrow fees can be a significant expense for investors, so its important to understand when they are and arent justified. In some cases this borrow rate can be punitive. Beyond Meat Inc (NASDAQ: BYND), 59.5% borrow fee. A third reason is to participate in a short sale is as a way of seeking favorable tax treatment. However, it is possible to get a general idea of the stocks with the highest borrow rates by looking at the implied borrowing costs of various options contracts. Identify stocks that meet your criteria using seven unique stock screeners. Aug 26, 2022 OptionMetrics calculates the borrow rate, which represents the costs of shorting across various horizons, across maturities. This is because a high borrow rate means that companies are having a hard time getting money, and this can lead to a slowdown in the economy. The interest rate is usually expressed as a percentage of the loan amount. Expensive Stocks To Borrow Here are the five most expensive stocks to short and the five most profitable stocks to lend, according to S3: 1. The approach is also ideal for people who are willing and ready to handle unlimited risks. Subscribe here to get interesting stuff and updates! However, the strategy is suited for traders, particularly day traders, who are familiar with the risks and regulations involved. Occidental Petroleum pulled back to the sweet spot ahead of earnings and is now moving higher, the question is if Warren Buffet is buying now or not. Therefore, if you are thinking about investing in a stock, it is important to keep an eye on the borrow rate. How Selling Etf Affect Underlying Securities. From below (also see corresponding chart below): "This stock has a pretty high short interest and it is relatively hard to borrow. 4. Very often hedge funds will target a stock for short selling simply because it already has a high short interest. What does a high borrow rate mean for stocks? View publication schedule for short interest reports, Zoom Video Communications moves up on mixed results but it may be too soon for a major rally. Liminal BioSciences Inc (NASDAQ: LMNL), 80.4% borrow fee. When stocks have a high short interest rate that indicates that investors believe their share prices will decline soon. Add to Watch List. Tilray Inc (NASDAQ: TLRY), 45.0% borrow fee. As the number of shortable shares available goes down the borrow rate goes up. In the stock market, the interest rate is referred to as the borrow rate. This is the rate that a company pays to borrow money from a lender in order to buy stocks. In addition, a high CTB fee may also be indicative of a short squeeze. Article printed from InvestorPlace Media, https://investorplace.com/2023/01/short-squeeze-stocks-alert-5-hot-stocks-with-high-cost-to-borrow-fees/. Currently, traders are paying more than $1 million per day in short financing costs on the stock, according to S3. The most common time a short borrow fee is assessed is when an investor sells a security before the lender has had a chance to sell it. Get daily stock ideas from top-performing Wall Street analysts. During early February, GME was ITB with a rate near 50%. Copyright 2023 InvestorPlace Media, LLC. WebHighest Cost To Borrow; Highest Short Interest % Float; OWNERS Retail Ownership Funds Flow Options Flow - Latest Day (Stocks) Options Flow - Latest Day (ETF) Second, if the stock price does fall below the sales price, the trader buys back the equal number of shares at the lower price. Highest Borrow Rate Stocks. Dear MULN Stock Fans, Mark Your Calendars for March 7. Additional key data such as the float, number of outstanding shares, and company industry is displayed. Whats most striking about NuZee is that the cost to borrow shares is 136%. Sign in to your free account to enjoy all that MarketBeat has to offer. All rights reserved. If a stock has a short interest ratio of 10%, then it means that for every 10 outstanding shares, one is held as a short. Sign up for our newsletter to get the inside scoop on what traders are talking about delivered daily to your inbox. These fees are also used as a factor in a short sellers risk/reward scenario. Is also worth noting that implied borrowing costs are not the only factor consider. Is in personal finance and investing, and more goes down the rate! Constitutes a high short interest rate that indicates that investors believe their share prices will soon.: BLDP ), 80.4 % borrow fee could climb even higher Dusaniwsky... Higher, Dusaniwsky said and insider transactions, earnings data, and real estate on! 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