HELP
Trading
How hard to borrow fees are calculated?
  • Promotion
  • Account Opening
  • Deposit & Withdrawal
  • Options Trading
  • Stock Transfer
  • Trading
  • Fees
  • IRA
  • About Us
  • Platforms
  • Webull Desktop
  • Glossary
  • Markets
How hard to borrow fees are calculated?

Hard to borrow stocks that are sold short are charged a hard to borrow fee which accrues daily.  The calculation for the hard to borrow fee is shown below.

Hard-to-Borrow Fee Calculation:

Current price of stock = $13.00

Number of shares sold short = 1,000

Hard-to-borrow rate = 6%

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)$13.00 x 1.02 = $13.26 = $14.00

(Per Share Collateral Amount) x (Share Quantity) = Trade Value$14.00 x 1,000 = $14,000

(Trade Value) x (Annual Hard-to-Borrow Rate) = Annual Hard-to-Borrow Fee $14,000 x 0.06 = $840

(Annual Hard-to-Borrow Fee) / (360 days) = Daily Hard-to-Borrow Fee $840 / 360 = $2.33 Daily Hard-to-Borrow Fee

Please note that the hard to borrow rate changes daily so the fee will vary each day.

Problem Solved?
Solved
Unsolved