Lesson 5 of 6 · 5 min

Cost to Borrow & Utilization

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

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

Tip

SUTOK shows utilization when data is available. 100% utilization with high CTB is a prime squeeze setup.

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