IB supports borrow and lend transactions via AQS, an electronic stock borrow and loan exchange that is cleared by the OCC.
Eligibility
Available to Portfolio Margin Accounts
The AQS Stock Borrow/Loan feature is available to IB customers who have a Portfolio Margin account. By default, all new accounts use Reg T Margin. If you are currently approved for options trading and maintain a minimum of USD 110,000 in your account, you are eligible to upgrade to a Portfolio Margin account.
Trading Permissions
Upgrade Your Trading Permissions
Before you can use the Stock Borrow/Loan feature, Portfolio Margin customers must upgrade their trading permissions to include access to the AQS marketplace.
To do this, log into Account Management and from the Trading Access menu use the Trading Configuration page. Scroll down and check the United States AQS Stock Lend and Borrow entry.
About the Market
About the AQS Marketplace
Regular trading hours are from 6:45 am - 2:45 pm ET, with most borrowing and lending activity taking place between 9:00 and 11:00 am.
Borrow and lend orders are only eligible to fill during regular trading hours.
Only LIMIT DAY orders are supported.
Up until 11:00 am, there is a price minimum of 200k for borrowing easy-to-borrow shares. Shares are considered easy-to-borrow if a reasonable assurance can be made at trade date that the shares will be available for borrowing on settlement date. Oftentimes the borrow rate on such shares is less than or equal to 0.00.
Rates
Borrow and Lend Rates
The IB Borrow and Lend rates as displayed in TWS are shown as "fee rates" or the rate you would pay or receive for borrowing or lending shares. The settlement price is: (102%) X (mark price rounded up to the nearest 1.00) with a 1.00 minimum.
When you borrow, you are responsible for:
Collateral on the transaction (settlement price X quantity).
The daily borrow fee (borrow rate X the collateral).
Lending
Lending in TWS via the AQS Marketplace
The quantity you have available to lend is shown in the Loanable Quantity field in the Stock Borrow/Loan page of TWS.
To lend, you must own the shares outright, and they must be physically available and held at the DTC. If your account has a margin balance, you may not be able to lend out all of the shares in a position. IB's segregation algorithm determines which shares are available to lend.
Borrowing
Borrowing in TWS via the AQS Marketplace
The Stock Borrow/Loan feature allows you to pre-borrow to support a short sale, take over borrowing for a short being managed by IB, or borrow to FOP out to another prime broker. The benefit to borrowing via AQS is that you have control over your borrow with access to wholesale borrow rates that were historically only available to prime brokers.
