What is a Hard-to-Borrow List?
A hard-to-borrow list outlines the securities that a brokerage house cannot provide to investors for short selling.
How Does a Hard-to-Borrow List Work?
Similar to goods and services, financial instruments exist in a limited supply, and some are less available than others. A brokerage house publishes a hard-to-borrow list that catalogs those securities it is unable to provide for short selling because of their extraordinarily limited supply. Clients may assume that securities not on the list are available to borrow for short selling.
For example, suppose stock XYZ appears on a brokerage house's hard-to-borrow list. This means that the brokerage house will not provide borrowed units of stock XYZ for clients who want to short the stock.
Why Does a Hard-to-Borrow List Matter?
A hard-to-borrow list provides security availability in an up-front manner that allows clients to alter their trading and investment strategies where necessary. Though clients can almost always short sell securities not appearing on this list, they should still always confirm that the borrowed units have been properly delivered.
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.