How are overnight borrow rates calculated?

All short positions are charged the daily market rate which changes based on
market conditions. In your client portal under Tools > Overnight Borrow
Calculator, you will find an Estimated Overnight Borrow Calculator which will
 provide an estimate for borrow costs related to any shares you would hold
short overnight. TradeZero will hold back an estimated amount from your
account balance on the trade date. When the overnight borrow fee is charged by
our clearing firm, on T+2, the estimated amount held back from your
account, will be returned, and the actual overnight borrow fee will be
deducted from your account. It will look like this:

• Day 1. Entry Date: 3/17/2025
  Deposit: $0.00
  Withdraw: $20.00
  Type: Locate & Borrow Charge
  Note: ONB Estimate Hold
  
  T+2. Entry Date : 3/19/2025
  Deposit: $20.00
  Withdraw: $0.00
  Type: Locate & Borrow Charge
  Note: ONB Estimate Return
  
  T+2. Entry Date: 3/19/2025
  Deposit: $0.00
  Withdraw: $18.00
  Type: Locate & Borrow Charge
  Note: ONB Actual
  

It is important to understand, an overnight borrow fee is based on settlement
(T+1) date but charged by our clearing firm on T+2 date. If you short a
security on Thursday, for example, and hold the short position overnight,
your account will incur 3 nights of fees. This is because, a trade on Thursday,
will settle on Friday and the cost of the overnight borrow carry over the
 weekend, and end when the covering trade settles on T+1. A short trade on
 Friday, however, will not settle until Monday, so you will not be charged an
overnight borrow fee over the weekend.


*If an account receives a Reg SHO Notice, the shares receiving the notice, no
matter whether a fee was paid, will need to be liquidated as per Reg SHO Notice by
the clearing firm.

Why is TradeZero America charging overnight borrows this way?
Beginning April 1, 2025, TradeZero America is moving the billing of overnight borrow fees in line with how the fees are charged by the clearing firm. We believe this should lead to lower
net overnight borrow costs and a savings for the client.