Cost to Borrow & Utilization
Lesson 5 of 65 min5 exercises
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The Cost of Shorting
Short sellers pay interest to borrow shares. This "cost to borrow" (CTB) varies based on supply and demand for borrowing shares.
Cost to Borrow
Low CTB (< 1%): Easy to borrow, low demand
Medium CTB (1-10%): Moderate demand
High CTB (10-50%): Hard to borrow
Extreme CTB (50%+): Very hard to borrow, squeeze potential
Medium CTB (1-10%): Moderate demand
High CTB (10-50%): Hard to borrow
Extreme CTB (50%+): Very hard to borrow, squeeze potential
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Utilization
Utilization = Shares on Loan ÷ Shares Available to Borrow
- Below 50%: Plenty of shares available
- 50-80%: Elevated
- 80-100%: Very limited supply
- 100%: No shares available to borrow
- Below 50%: Plenty of shares available
- 50-80%: Elevated
- 80-100%: Very limited supply
- 100%: No shares available to borrow
Tip
SUTOK shows utilization when data is available. 100% utilization with high CTB is a prime squeeze setup.
Learn · 3/3
Key takeaways
- CTB = interest rate to borrow shares
- Higher CTB = harder to short, squeeze potential
- Utilization shows % of borrowable shares used
- 100% utilization = no shares to borrow
Next: 5 quick exercises. Miss one and it comes back at the end.