TD Ameritrade CTB Outlier
Documented Incident: July 28, 2023 - July 31, 2023
Last Updated: Sept 15, 2023
Incident Overview
This page documents a significant Cost to Borrow (CTB) incident at TD Ameritrade, one of the largest retail investment platforms in the United States.
Source: Full TD Ameritrade statements were obtained and analyzed. All private investor information has been redacted while maintaining documentation of the incident.
Key Documentation
Screenshots and detailed statements from this incident are available in the research archives.
Investigation Details
This incident involved unusual Cost to Borrow (CTB) fluctuations during the specific trading period of July 28, 2023 through July 31, 2023.
CTB Significance
The Cost to Borrow metric is crucial for understanding:
- Short selling availability
- Stock lending market mechanics
- Potential short squeeze indicators
- Broker-dealer inventory dynamics
Summary
This incident represents documented, verifiable market activity from a major retail broker during a specific period. The CTB movement recorded provides valuable data points for understanding market mechanics and broker operations.
The following is a documented incident as we received the full TDAmeritrade statements (TDAmeritrade - broker website). We have redacted any private investor information, captured screenshots, and herein provide a detailed account of this incident for clarification..
The cost to borrow (CTB) for a stock, also known as the “borrowing cost” or “stock loan fee,” refers to the expense incurred by traders or investors when they borrow shares of a stock from a brokerage or another party for short selling purposes. Short selling involves selling borrowed shares with the expectation that their price will decline, allowing the trader to buy them back at a lower price and return them to the lender, profiting from the price difference.
Some investors enable lending their shares in order to collect this CTB fee. TD Ameritrade’s policy is to split the CTB fee (50%-50%) when enabling what they call the “Fully Paid Lending Income Program.”
TD Ameritrade provides a daily statement showing the CTB fee and the credited amount for the lent shares. The following are screenshots for the period of one weekend that was a substantial outlier. The program works over the weekends if the shares are lent, and usually, it does not change for Saturday and Sunday as it will be similar to the Friday before. However, this incident on the weekend of July 28, 2023, was an outlier. The CTB substantially went down to single digits for each day on that weekend. Then it came back on Monday to the normal levels.
Timeline:
On July 27, 2023 (Thursday), the nightly rate reported by TD Ameritrade was 175.71%.
On July 28, 2023 (Friday), TD Ameritrade reported a nightly rate of 5.77%.
On July 29, 2023 (Saturday): Nightly rate reported by TDAmeritrade as 5.77%.
On July 30, 2023 (Sunday): Nightly rate reported by TDAmeritrade as 5.77%.
On July 31, 2023 (Sunday), TD Ameritrade reported a nightly rate of 161.54%.
Please contact us if you notice this same outlier in your account.
Here is how to access your daily statements for the fully lending program. Please ensure that you select daily statements instead of monthly ones:
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