Fact Checking
Well-Known Member
Ihor is reporting NIO short interest 21.5% of float with 36.8% borrow fee, while Tesla s
hort interest is 27.8% of float with only .58% percent borrow fee. Why such a drastic difference in fees?
Ihor Dusaniwsky on Twitter
Ihor's reply (for a different stock):
Twitter
"Because there is much more $GOOS shares still available to borrow compared to $HEXO shares. Total available lendable shares vary from stock to stock - usually between 40% to 60% of float but sometimes higher, sometimes lower. That is why rates fluctuate between stocks."
"Because there is much more $GOOS shares still available to borrow compared to $HEXO shares. Total available lendable shares vary from stock to stock - usually between 40% to 60% of float but sometimes higher, sometimes lower. That is why rates fluctuate between stocks."
Basically the "tradeable float" of a stock is overestimating the true "shortable float" which is lower.
This, if true, also falsifies the "Tesla naked shorting" conspiracy theory: if market makers are able to short with impunity and can short arbitrary amounts of TSLA, why did the borrowing rate increase to 20% last May? Why is it below 1% today with a similar number of shares shorted?
The reason: there's a real supply of shortable shares, which can become constrained - but which expands (slowly) with more lendable shares.
There's over a dozen "market makers" for Tesla: if the naked short selling conspiracy was true they'd all have to conspire to artificially increase rates to 20%: just one market maker could outbid them with 19% rates and reap all the financing profits...
Sorry @Hock1, I'm with Ihor's explanation of market mechanics here.
I agree that the 3 day delivery requirement allows quick swing-shorting shenanigans, which can manipulate the price - until a bigger fish comes along and takes advantage of the MMD.
Naked shorting doesn't seem to exist for long term short positions of ~38 million TSLA shares short currently: they are all paired with real borrowable stock.
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