(1) What is short selling
Short selling in securities is the most basic way of short selling in US stocks, which is the opposite of doing long. When an investor does not hold a certain stock, but believes that its price will fall in the future, a certain amount of funds in the investor’s securities account can be used as a guarantee to borrow the stock from the brokerage firm and sell it; when the price drops, the price will be lowered Buy the same amount of the stock and return it to the brokerage firm, thereby earning the difference between selling high and buying low.
(2) How to operate
If you want to short a certain US stock, you can directly select " Sell " when placing an order for the individual stock . In the Tiger Trade APP , you can click Portfolio > Sell at the bottom of the individual stock details page to perform operations, and the order transaction is a successful short.
(3) Securities lending interest
Since the stocks sold by investors are borrowed from brokers, they need to pay a certain amount of interest to the brokers (the interest is calculated from the T+2 day of shorting ).
Industry rules to charge interest margin for the " market value ( Mark-to-Market ) " , that is the end of the first day closing stock price multiplied by 102% and then rounded to the dollar, then the stock price multiplied by the integer margin The quantity, the mortgage amount (the multiplier of the mortgage amount should be at least 100% , which may be higher according to applicable laws or market practices).
For example, if you short 100 stocks and the closing price on T+2 is 59.24 dollars, the corresponding cash mortgage amount is calculated as follows: 59.24*102%=60.4248 , rounded to 61 dollars; multiplied by the number of shares to get the final amount 61* 100=6100 USD. If you hold a short position for multiple days, the daily mortgage amount will change accordingly, and so on.
The short interest rate of individual stocks in US stocks is dynamic, that is, the short interest rate of individual stocks will be adjusted according to the degree of risk of the stock, the liquidity of the stock and the difficulty of borrowing (the number of stocks available for lending). When stocks fluctuate greatly and there are too many short sellers, it will cause the interest rate of securities lending to rise, and sometimes the interest rate may exceed 100% . Under normal circumstances, if the stock price trend is stable and the short-selling pool is abundant, the interest rate will be relatively stable and cheap.
( 4 ) Reference interest rate of individual stocks
On the individual stock quotation page of Tiger Trade APP , click on the " financing " symbol on the right side of the stock price to view the current day's securities lending interest rate of the stock as a reference for estimating the actual lending interest rate. If the specific number is not displayed here, it means that there are no coupons, no fixed interest rates, or interest rates are changing.