As my regular readers are aware, I have sold short a number of penny stocks over the last year. However, that strategy has not worked recently due to my broker, Interactive Brokers, forcing me to close out short positions without notice due to an inability to continue to borrow shares. I am therefore searching for a new and better broker. If you happen to know of any brokers that are good at getting long-term borrows on hard-to-borrow OTC BB and Nasdaq stocks (it would also be great to be able to get pre-borrows) and that would be willing to deal with a sophisticated individual investor, please contact me or leave a comment below. If you know what kind of account / trading minimums I would need for them to give me the time of day, please let me know.
I am currently looking into Genesis Securities as well as RBC Professional Trader. If you have experience with either of these, please let me know by leaving a comment here or sending me an email.
Thank you for your help.
0 thoughts on “Request for help – Looking for a direct market access broker”
After looking at RBC some more it looks like the only opportunities to use their awesome platform are for hedge funds and proprietary traders (who trade using RBC’s capital). I’ll still ask them to be sure, but it looks more likely that I will end up with Genesis (they seem to be more open to retail traders and their platform is awesome).
Did you look at Think or Swim? Are they only good for short-term borrows? I just know that Tim Sykes says he uses them
ThinkorSwim hasn’t been able to get me nearly as good borrows as I would like. Also, their trading platform is not as good as IB. Plus, they are not a direct market access broker — for speed of trading I want to be able to choose exactly which ECN or exchange to send my orders to.
To answer another of my questions, Genesis Securities has pre-borrows on hard-to-borrow stocks, plus a great list of easy-to-borrow stocks. Looks like I’ll be opening an account up with them.
Michael, I use IB and don’t have experience w/ Genesis or RBC, but would be curious how your share-borrowing goes w/ either of them. If you have time to post about them after you become acclimated, I would appreciate it much. Thanks and thanks for all your great fundamental research.
Short AMSC (fraud stock) and HEV. Puts actually available on AMSC.
I was referred to Grace Financial by Tim Sykes. They cater to hedge funds but will deal with higher net-worth / high-volume solo traders. They clear through Goldman Sachs so they may have good borrows.
Genesis has its borrowable stocks list publicly available online: http://www.gndt.com/support/shortlist.htm
Ok, good luck. Hopefully he didn’t refer Grace just because it might be an affiliate of Tim’s. For all his hatred of stock promoters, he’s quite a promoter himself. 😉 Please let me know how the platform is. For instance, in IB, I still haven’t figured out how to set up a chart of combinations of futures prices (the “combined contracts” doesn’t seem to work), and that would be real handy. Also curious what commission deal I could get from Grace (I see that it seems widely negotiable, but I send IB probably $300+/mo in commissions, so hopefully that can serve as a basis for comparison).
Frank – I’m going to be paying a lot higher commissions at Grace than I am at IB, and I am doing a higher volume of trading than you. The main reason I am trying them is because they should have good borrows. As to futures, I have no clue. I’ve never traded those.
Alright, thanks for the info. PS, short SQNM… technically it’s perfectly poised Sykes-like to drop, and fundamentally it’s a POS that recently issued a new chunk of stock at $15/share. Market cap large enough that puts are available, if you prefer those.
I just found out about Terra Nova Financial. They are self-clearing, which means they probably don’t have the best short borrows, but they seem to be a pretty sophisticated broker.
Who did you end up going with? Grace or Terra?
I am currently trying out Grace. My account should be set up and funded in under a week. Expect to see a review of them on this blog after a month or two.
Sounds good, take it easy bud