: What kind of symbol can be shorted? I am new to sell short concept. but I'm interested because I think some stocks may go weak in the future. I am using Firstrade but when I try to sell short some stock, it told me This

Vote Up Vote Down   0 Reactions

Login to give Reaction!

Any publicly traded financial instrument can be sold short, in theory. There are, however, many regulations associated with short sales of US equities that may prevent certain stocks from being sold short at certain times or through certain brokers.

Some examples:

the most basic requirement (this isn't a regulation, it's just the definition of a short sale) is that you or your broker must have access to someone willing to loan you his/her shares. If you are interested in shorting a security with few shares outstanding or low trade volume, there may simply not be enough people in the world willing to loan you theirs. Alternatively, there may be a shareholder willing to loan shares, but your broker may not have a relationship with the clearing house that shareholder is using. A larger/better/different broker might be able to help.
threshold securities list - since 2005, each day certain securities are not allowed to be sold short based on their recent history of liquidity. Basically, if a certain number of transactions in a security have not been correctly settled over the past few days, then the SEC has reason to believe that short sales (which require extra transactions) are at higher risk of falling through.
circuit breaker a.k.a. alternative uptick - since 2011, during certain market conditions, exchanges are now required to reject short sales for certain securities in order to prevent market crashes/market abuse.

Vote Up Vote Down   0 Reactions

Login to give Reaction!

Some platforms/brokers have HTB indication for a stock symbol, meaning Hard To Borrow. That usually means you can't sell it short at the moment.