Review: TradeZero America Short Stock Locate Platform

September 11, 2019 12:01 PM
What we like about TradeZero platform
How to find hard to borrow short stock locates
What to do when you get dreaded message, “No Shares Available To Short”
Short Sale stock borrow and locate

Short Sale stock borrow and locate

Morning market preparation finds traders scrambling to scan stock news, monitor pre-market stock price activity, historical price levels, and locate shares to borrow to short stock.

It chafes traders when they find a perfect short selling stock candidate, and you enter the order into your trading platform, and then you get the dreaded message, “No Shares Available To Short.”


Hard to Borrow Short Stock Loan


Traders and investors are required to borrow shares from a lender (typically your brokerage firm) to sell a stock short.  The trader then sells shares on the exchange to a buyer. The trader returns those shares to the lender when buying back the shares.

The short seller wants the price of the stock to decrease.

Most stock brokerages have a daily short stock list of the stocks available to short. The list is usually made up of large-cap liquid stocks.


Finding Shares To Sell Short


But, what happens when you need to short mid and small-cap stocks that do not trade much?

Most active traders have problems borrowing shares to short in stocks in-play. An in-play stock is usually a stock in the news that gaps higher on high volume. Active traders rush to short these stocks at certain price levels but find that their brokerage firms are unable to locate shares to short.


Review of TradeZero Short Stock Locate Service

We reviewed TradeZero’s short stock locate trading platform.

Earlier in the day, we attempted to borrow shares in a hard-to-borrow stock before the open of trading.  

Our primary clearing firm had no success in finding shares to short. So, we felt this would be a good test of the TradeZero short stock locate service.

The stock we wanted to short was an in-play news stock that gapped higher in price on the market opening.

Around 10:00 am, we entered the stock symbol to borrow shares on the TradeZero platform.

Hard to Borrow Stock We Want To Short

The platform scanned its five venues to locate stock to borrow automatically and came back with a short stock locate immediately. The test was a success.

The locate was expensive. We paid $0.038 per share on a $3.85 stock, but we were willing to pay this rate because we were expecting the price to fall about $0.50.

TradeZero Stock Loan and Borrow


Recycling Borrowed Shares 

TradeZero also has a system to recycle a trader's stock locate. We covered our short later in the morning, but we borrowed the shares for the whole trading day.

TradeZero platform allows us to recycle our located shares to other traders looking to short the stock. We entered a request to resell or short stock locate, and it took a few minutes, but again a success. We were able to loan out the shares at a rate of $0.017 per share. We were happy with this because we were done trading the stock for the day.


Worth a Look – TradeZero Trading Platform

What We Like:

TradeZero’s ZeroPro platform is for active traders and has the speed and features to navigate fast-moving markets. Highlights included dynamic streaming quotes, hot-keys, charting and Level 2 stock data, as well as customizable windows. 

TradeZero has commission-free brokerage and direct access to US stock and options market exchanges and has advanced professional-level tools for active traders and investors.

What We Like Even More:
Traders don’t like it when they are researching a stock and then enter a trade order, and the dreaded message “Sorry There Are No Available Shares To Short” displays.

TradeZero has a short stock locate feature on all of its platforms, making it easier and simpler for the trader to find hard-to-borrow shares for stock shorting. 

Best Use:
Short stock locates — traders that trade in-play news stocks and hard to borrow shares. We love the zero commission too.

TradeZero Trading Platform


About TradeZero America

TradeZero America is a New York-based online broker-dealer that offers retail investors commission-free stock trading and direct market center access to US stocks and options. TradeZero’s advanced suite of desktop, web-based, and mobile software platforms accommodates all types of traders. ZeroPro delivers speed and functionality for active traders, ZeroWeb has dynamic features for both active and beginning traders, and Zero Free is the company’s free real-time browser-based trading system. Traders on the go can access their accounts and trade via the TradeZero America mobile app. TradeZero America’s innovative features include capabilities for stock shorting and unparalleled 24/7 customer support.


About the Author

Futures Magazine is a premier resource for trading insights and trade ideas. The magazine publishes articles daily on stocks, futures , commodities, options, forex and crypto.