"Carrying Cost?" The rate paid by a short selle
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Posted On: 04/05/2017 9:32:01 AM
"Carrying Cost?"
The rate paid by a short seller to short PTOI is actually on the required cash collateral...which is 102% of the share price rounded up to the nearest $1. With PTOI's current rate being 0.66%, to borrow PTOI shares a person will pay the borrow rate on $1 for each share short. Based on that, the current rate to be short PTOI is effectively now a 14% annual rate.
Brokers, and shareholders who are set up to use AQS, can loan out shares can collect borrow rate. Brokers can loan out up to 140% of the amount on margin from each of their clients' accounts and shareholders who do self-directed lending can loan out their shares at whatever rate someone is willing to pay.
That said, there are only 7,810 shares of PTOI short in total at last count...effectively zero. Many investors have deluded themselves into thinking the short interest on PTOI is huge, maybe because they're hoping for a short squeeze, trying to fool others into buying by pitching a MOASS story. It may also be that they don't believe any longs would ever sell their stock in what they believe to be an amazing company--and therefore may reason that naked short sellers must really be the ones selling.
Those investors firmly believe that all short interest data is faked...yet oddly have no problem believing that PTOI has a revolutionary pyrolysis process...because the founder, who committed accounting fraud to fool investors, certainly wouldn't also fraudulently lie about being able to produce diesel for $0.25/gallon (sarcasm).
The longs here who think short sellers are waiting to gobble up borrows, could certainly set up for self-directed lending and loan out their shares to at least get 14% APR while they're waiting for years for PTOI to perform...but given only 7,810 shares in total being short, it shows none are doing that--undoubtedly a combination of not wanting to loan out their shares for 'religious' reasons and the odds being they wouldn't find many takers even if they did want to collect the 14% APR.
The rate paid by a short seller to short PTOI is actually on the required cash collateral...which is 102% of the share price rounded up to the nearest $1. With PTOI's current rate being 0.66%, to borrow PTOI shares a person will pay the borrow rate on $1 for each share short. Based on that, the current rate to be short PTOI is effectively now a 14% annual rate.
Brokers, and shareholders who are set up to use AQS, can loan out shares can collect borrow rate. Brokers can loan out up to 140% of the amount on margin from each of their clients' accounts and shareholders who do self-directed lending can loan out their shares at whatever rate someone is willing to pay.
That said, there are only 7,810 shares of PTOI short in total at last count...effectively zero. Many investors have deluded themselves into thinking the short interest on PTOI is huge, maybe because they're hoping for a short squeeze, trying to fool others into buying by pitching a MOASS story. It may also be that they don't believe any longs would ever sell their stock in what they believe to be an amazing company--and therefore may reason that naked short sellers must really be the ones selling.
Those investors firmly believe that all short interest data is faked...yet oddly have no problem believing that PTOI has a revolutionary pyrolysis process...because the founder, who committed accounting fraud to fool investors, certainly wouldn't also fraudulently lie about being able to produce diesel for $0.25/gallon (sarcasm).
The longs here who think short sellers are waiting to gobble up borrows, could certainly set up for self-directed lending and loan out their shares to at least get 14% APR while they're waiting for years for PTOI to perform...but given only 7,810 shares in total being short, it shows none are doing that--undoubtedly a combination of not wanting to loan out their shares for 'religious' reasons and the odds being they wouldn't find many takers even if they did want to collect the 14% APR.
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Yes, I understand your penny stock also is the real deal, created with the inventiveness of Edison and destined to be the next Microsoft. Yes, I understand that the delays are also only because your company is making their product and/or technology even more revolutionary.