Definition of Hard-to-borrow list:
A compilation of stocks and bonds that are not easily attainable for buying or selling.
A hard-to-borrow list is an inventory record used by brokerages to indicate what stocks are difficult to borrow for short sale transactions. A brokerage firm's hard-to-borrow list provides an up-to-date catalog of stocks that cannot easily be borrowed for use as a short sale.
Short selling of stocks is built on the notion that an individual trader or investor, wanting to profit from a decrease of that stock's price, is able to borrow shares of that stock from the broker. Brokerages have a variety of ways to provide access to shares that can be sold short, but regardless of their methods, the result is a finite number of shares available for shorting. Once the number of shares available has come close to running out, the broker will publish a notation of some kind on their platform. This alerts account holders that if they attempt to sell that security short, their trade order may be refused.
How to use Hard-to-borrow list in a sentence?
- Short sellers rely on brokers to have stock shares available to borrow.
- If the broker has very few shares of a stock available, then that stock is placed on the hard-to-borrow list.
- Stocks on the hard-to-borrow list may not be allowed to short.
Meaning of Hard-to-borrow list & Hard-to-borrow list Definition