The easy to borrow list (short list) is imported daily into the trading platform. 

If the stock is easy to borrow the trading platform will show a green "S" next to the symbol box.

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When holding any short position overnight, an overnight borrow fee will
apply. This fee will be charged every day you hold a short position
overnight and until the short position is covered.


You can see an estimate of the fee by logging into your 


The overnight borrow calculator will include all weekdays, weekends, and
holidays where a fee will apply.


It is important to check the overnight borrow calculator every day you
plan on holding your short position overnight.


The rate is determined by the supply and demand to locate the shares on that day.

The fees can vary during the day depending on market conditions. Locate fees are charged only after the price for the locate is accepted.

If the locate shares are declined, then no fee is charged.

When a stock is halted, it means trading is suspended by the regulatory bodies overseeing the exchanges and marketplaces. This may occur for a variety of reasons including, pending news, regulatory investigation, corporate restructure, or activation of the Limit Up Limit Down rule.

If a stock is halted only for a brief period during the day, your open short position can be covered when trading resumes.

However, if a stock is halted for an extended period of time and you cannot cover the open short position before the close of after-hours trading at 8 PM ET, you will be responsible to pay any overnight borrow costs, margin costs and any other fees incurred daily until the stock begins trading and the position can be covered or until DTC delists the security.

TradeZero will need to have sufficient equity in the account to cover these charges.

For more information on trading halts see: 

https://www.finra.org/investors/investing/investment-products/stocks/trading-halts-delays-suspensions

Equity securities with a market value of less the $3 per share may not be purchased on margin or deposited as margin collateral.

If the market value of a security drops below $3 per share, the security will not be assigned any value as collateral to secure your margin obligation.

As of August 2, 2024, the new margin requirement for short positions that are low priced is as follows:

Stocks priced below $5.00 = $5.00 per share margin requirement

Margin requirement = 5,000 x $5 = $25,000

Please also be aware that margin requirements may change daily and overnight due to various factors including, but not limited to, volatility, low float, and percentage of insider holdings.

The Short List is a proprietary tool on TradeZero America’s trading platform that checks the availability and price per share of locate-required securities.

 Send your queries to support@tradezero.us and we’ll get back to you promptly.

Regulation SHO Rule 204 is the Close-out Requirement that requires brokers and dealers that are participants of a registered clearing agency to take action to close out “failure to deliver” positions.

Under Rule 204(a) of Regulation SHO, all “failure to deliver” purchases must be closed out by borrowing or purchasing securities no later than the start of regular trading hours on the following settlement date.

If you day trade a security and consistently hold a short position, then you are consistently net short the security and are at risk of a “failure to deliver” if TradeZero America or it's clearing firm cannot borrow the securities.

TradeZero tries to make this process as transparent as possible. We request from our clearing house before close of business any client positions that are at risk of “failure to deliver”. We then send to those clients a notice via email so they can make a better decision whether to stay in the position or get out of the position.

Reg SHO Rule 204(b) states that if a clearing house does not close out its “failure to deliver” in an equity in accordance with Reg SHO Rule 204(a) then the clearing house and any broker dealer for which it receives trades for clearance and settlement may not accept short sale orders from its customers in that equity without first borrowing the security or entering into a bona fide arrangement to borrow the stock. To avoid this, TradeZero takes the extra step to inform its clients of any potential “failure to deliver.”

As a rule of thumb, stocks that have a small float or have a large short interest are more at risk of a “failure to deliver” resulting in receiving a Reg SHO Rule 204 notice than stocks that have a large float and small short interest. It is important to be an educated trader and understand the rules that may affect your decision making.

For more information visit:


https://www.sec.gov/investor/pubs/regsho.htm

https://www.sec.gov/divisions/marketreg/mrfaqregsho1204.htm

TradeZero’s short locator calculates the number of shares you can short at the time you request the locate quote.


Some variables that may affect the number of shares you can short at a given time are price of security, margin requirement of security, and the available cash in your trading account.


When sending a short order, the order server will then recheck how many shares you can short based on those variables at the time you send the order.


Stocks that fall below $3 are non-marginable and the non margin ability of a stock may reduce the number of shares you may trade regardless of how many shares you have located.


TradeZero does not permit shorting any stock below $0.50. If the price of a stock falls below $0.50 between the time you locate shares and the time you place a short order, you will not be able to short the stock.


TradeZero cannot refund the cost of any shares you locate due to changes in stock price, marginability of the stock, or the available cash in your account.


Reminder: TradeZero does give you the ability to put up for credit any located shares not currently in use and you may be able to recoup a portion of your locate fees. You can put any unused located shares up for credit until 8:00 PM ET.


Short Selling