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rebate rate

15:37 17-Feb-21


The rebate rate on a stock is the interest rate that investors pay for borrowing the stock in order to short sell it.  In the modern ultra-low rate environment, typical net rebate rates are a fraction of a percent on most liquid stocks.  However, markets that are rigged to go up can also result in double or even triple digit rebate rates, when shorting in particular stocks becomes overcrowded.  That is just one reason why this service only offers long-side research and analysis.

Although many retail investors are completely unaware of them because their brokerages invisibly loan out their shares and retain the revenue, my experience indicates that rebate rates are a crucial tool for analyzing market dynamics.  Big Money was able to effectively game market transparency regulations to insure that figures like shorted float always so dated and prone to miscounting that they are nearly useless for actual trade construction purposes.  By contrast, rebate rates are a real-time figure that is almost impossible to manipulate.