Shorting stocks with IB TWS

[diliff]

Guys, might be a silly question, but I've just recently set up an account with them and I'm loving the platform, although finding my way around it and using it efficiently will take a bit of time. My question is, exactly how do you short stocks through IB's TWS??

I understand the basic mechanism of shorting where you essentially borrow stock, sell it immediately and hope that the price goes down so you can buy it later and hand it back to the lender, keeping the difference.

In terms of actually doing it though, I'm not familiar. I assume there is more to it than merely telling IB to sell stock you don't own. I've tried looking on the TWS user guide, I've tried google searches with various combinations on the theme, and nothing seems to have any info on exactly what steps you take to do it! It isn't an option available to me on the order window, as far as I can see.

Can anyone help me out here, either by pointing me to documentation or explaining what I need to do?

 

[disarray]

check the shortable stocks list on the ib website for whatever exchange you trade. if it is on the short list then just enter a trade as normal using sell instead of buy and place your bracket order as usual.

list at http://www.interactivebrokers.com/en/p.php?f=shortableStocks&ib_entity=llc

 

[diliff]

check the shortable stocks list on the ib website for whatever exchange you trade. if it is on the short list then just enter a trade as normal using sell instead of buy and place your bracket order as usual.

list at http://www.interactivebrokers.com/en/p.php?f=shortableStocks&ib_entity=llc

Oh right, so it was what I was guessing may be the case. You just sell stock that you don't own and it automatically shorts it for you? Does it warn you in advance that you are shorting and show up in your trades/portfolio as a short position?

 

[disarray]

yes, you just sell and it automatically shorts for you. when you look at the list says something like >10,000,000 available or something like that, but i don't know how they sort it.

no it doesn't warn you that you are shorting, it shows up as a short trade in your portfolio, and its still subject to margin requirements etc. once you do it its all pretty self evident.

 

[Nick Radge]

...check the shortable stocks list on the ib website...

TWS has a function that indicates if shorting is available when you put the ticker symbol in. It will show up as a green light if its shortable or red if its not. As a default the indicator is turned off, so just amend the configuration:

Select:
Configure
Global Configuration
Portfolio
Order Management

On the right of the page select:
Market Data Columns
Contract Description
Shartable --> Add

At the bottom:
Apply

 

[diliff]

TWS has a function that indicates if shorting is available when you put the ticker symbol in. It will show up as a green light if its shortable or red if its not. As a default the indicator is turned off, so just amend the configuration:

Select:
Configure
Global Configuration
Portfolio
Order Management

On the right of the page select:
Market Data Columns
Contract Description
Shartable --> Add

At the bottom:
Apply

Thanks Nick. That only seems to work with the portfolio window. I created a couple of other windows for US stocks, US options, etc, and it doesn't seem to allow you to put that column in them... But again, thanks.

As I'm currently in the UK and following the US market a bit, I tried shorting a US stock (FSLR) with a fairly small market order and it the order sat there unfilled. When I moved the mouse over the pending order, it said something along the lines of "we do not currently have this stock, this order is pending while we see if we can source it".

I didn't particularly like the idea of waiting as it was intended to be a fairly short term trade and I didn't want it to move against me. Is this a common occurance? I haven't tried shorting anything else but it was slightly disconcerting. I know that IB would need to find the stock to borrow before it could allow you to short it, but I thought it would be more instantaneous than that, or was this just unlucky?