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July 12, 2023 - Interactive Brokers has announced the launch of a new Securities Lending Dashboard that provides clients enhanced transparency into short selling activity for specific securities. This new tool complements Interactive Brokers’ Securities Loan Borrow (SLB) system, a self-service utility that lets clients search for stocks available to short on the Interactive Brokers platform for free.
Interactive Brokers states the dashboard covers securities trading in North America, Europe, and Asia. It is available to clients through the company's Trader Workstation platform.
“Interactive Brokers continues to be at the forefront of transparency in the securities lending market,” said Milan Galik, Chief Executive Officer of Interactive Brokers. “The new Securities Lending Dashboard is a straightforward tool for advanced traders and hedge fund clients seeking to analyze potential short-selling investment opportunities. Our clients can now access a more comprehensive data set to evaluate their short trade ideas and use our Securities Loan Borrow system to identify shortable securities.”
The new Securities Lending Dashboard lets clients view a snapshot of securities lending market data and then explore additional market intelligence, including:
- Utilization: A measure of supply and demand in the securities lending market, which measures the on-loan quantity (shares actively borrowed) relative to the inventory quantity (shares available to be borrowed)
- Borrower Depth: A score indicating how many borrowers are actively borrowing shares
- Lender Depth: A score indicating how many lenders are actively lending shares
- Average Duration: The weighted average duration of all open loans, expressed in calendar days
- Clients can also select two stocks and compare short-selling data across different date ranges.
There is also a premium subscription offering additional metrics. These include Short Interest indicator, On-Loan quantity, On-Loan Value, and Days to Cover ratios. Days to cover estimates the time required to close out short positions based on recent trading volumes.
Interactive Brokers says the dashboard provides clients enhanced transparency into short selling dynamics. However, some critics argue such tools could aid speculative short selling.
Regulators continue monitoring short selling risks closely. Concerns include potential market manipulation via "naked" shorting. Interactive Brokers maintains the dashboard will help clients analyse opportunities and manage risks appropriately.
The launch comes as scrutiny of short selling builds. As reported by Reuters back in May, short-selling is a key focus for US prosecutors with a top official Avi Perry, the chief of the market integrity team, at the Department of Justice saying “You’ll see some more activity from us involving short sellers sometime in the next few months”.
As Bloomberg reported last week, the UK Treasury is looking to end the public disclosure of Hedge Fund short-selling where the public register of short positions worth 0.5% or more of any London-listed firm will be replaced by an aggregated list.
