Let's throw some numbers at the situation here....
Post# of 148161
(Total Views: 514)
Posted On: 10/07/2021 5:32:54 PM
Re: chuckles759 #107072
Let's throw some numbers at the situation here....
Current price of stock = $1.75
Number of shares sold short = 150,000
Borrow rate = 115% (I'm not sure if this already includes a "Hard-To-Borrow Fee" )
Current industry convention = 1.02
* The current industry convention percentage set by the securities lending market participants is subject to change.
(market price of stock) x (1.02) = Per share collateral amount (rounded up to the nearest dollar)
$1.75 x 1.02 = $1.785 = $2.00
(Per share collateral amount) x (number of shares borrowed) = Market value of the security borrowed
$2.00 x 150,000 = $300,000.00
(Borrow rate) x (market value of the security borrowed)/360 days = daily borrow fee
115% x $300,000.00 / 360 = $958.33 daily borrow fee
So...right now...every day a big short sits on a 150,000 share short position....it's costing them over $950.00 PER DAY !!!
...JUST TO HOLD THE SHORT POSITION !!!
This is calculated and posted daily and must be paid monthly for the time length the position is held (the current average age of open short positions is now over 90 days), or when the position is sold.
So....I'm thinking that if a short has held a 150,000 share short position open for 90 days....I'd have to do a lot of math to calculate how ugly it would currently be....I don't think I have enough Pepto to do that....
....mercy upon their souls....
...or they walk away from their position, broker liquidates their account, and what can't be paid for is considered a Fail to Deliver (FTD) that is reported to FINRA and the SEC.
[late add]
I had a thought....let's see what's getting charged everyday to the CYDY shorts....
(market price of stock) x (1.02) = Per share collateral amount (rounded up to the nearest dollar)
$1.75 x 1.02 = $1.785 = $2.00
(Per share collateral amount) x (number of shares borrowed) = Market value of the security borrowed
$2.00 x 35,000,000 = $70,000,000.00
(Borrow rate) x (market value of the security borrowed)/360 days = daily borrow fee
115% x $70,000,000.00 / 360 = $220,547.95 daily borrow fees
Current price of stock = $1.75
Number of shares sold short = 150,000
Borrow rate = 115% (I'm not sure if this already includes a "Hard-To-Borrow Fee" )
Current industry convention = 1.02
* The current industry convention percentage set by the securities lending market participants is subject to change.
(market price of stock) x (1.02) = Per share collateral amount (rounded up to the nearest dollar)
$1.75 x 1.02 = $1.785 = $2.00
(Per share collateral amount) x (number of shares borrowed) = Market value of the security borrowed
$2.00 x 150,000 = $300,000.00
(Borrow rate) x (market value of the security borrowed)/360 days = daily borrow fee
115% x $300,000.00 / 360 = $958.33 daily borrow fee
So...right now...every day a big short sits on a 150,000 share short position....it's costing them over $950.00 PER DAY !!!
...JUST TO HOLD THE SHORT POSITION !!!
This is calculated and posted daily and must be paid monthly for the time length the position is held (the current average age of open short positions is now over 90 days), or when the position is sold.
So....I'm thinking that if a short has held a 150,000 share short position open for 90 days....I'd have to do a lot of math to calculate how ugly it would currently be....I don't think I have enough Pepto to do that....
....mercy upon their souls....
...or they walk away from their position, broker liquidates their account, and what can't be paid for is considered a Fail to Deliver (FTD) that is reported to FINRA and the SEC.
[late add]
I had a thought....let's see what's getting charged everyday to the CYDY shorts....
(market price of stock) x (1.02) = Per share collateral amount (rounded up to the nearest dollar)
$1.75 x 1.02 = $1.785 = $2.00
(Per share collateral amount) x (number of shares borrowed) = Market value of the security borrowed
$2.00 x 35,000,000 = $70,000,000.00
(Borrow rate) x (market value of the security borrowed)/360 days = daily borrow fee
115% x $70,000,000.00 / 360 = $220,547.95 daily borrow fees
(12)
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