Shorting a stock requires borrowing shares to sell, and that borrow itself carries its own fee, separate from any margin interest on cash borrowed.
How it works
Shares shorted times the share price gives the position value. That value times the annual borrow fee rate, times days held divided by 365, gives the borrow fee cost.
What this does not include
This computes the borrow fee alone — a short seller may also owe any dividends paid by the borrowed stock to the share lender, an additional cost beyond the borrow fee this calculator computes.
How to use this calculator
- Enter shares shorted, share price, annual borrow fee rate, and days held.
Frequently asked questions
Why do borrow fees vary so much between stocks?
They’re driven by supply and demand for shares available to borrow — a heavily shorted, “hard-to-borrow” stock can command a much higher fee than an easily available one.
What is a “hard-to-borrow” stock?
A stock with limited shares available for short sellers to borrow, often due to heavy existing short interest or limited float, driving up the borrow fee rate significantly.
Does the borrow fee change over time?
Yes — borrow fee rates can fluctuate daily based on real-time supply and demand for borrowable shares, unlike a fixed-rate loan.
