GlossaryMarket Structure

Cost to Borrow

The annualised fee a short seller pays to borrow shares, set by supply and demand in the securities-lending market. A high cost to borrow (CTB) signals the shares are scarce and hard to borrow.

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advancedMarket Structure

Naked Short Selling

Ordinary short selling borrows shares before selling them. Naked short selling skips that step — selling shares that were never borrowed or arranged for. It is tightly regulated in the US, it is one way 'fails to deliver' can arise, and it sits at the centre of one of the most heated debates in modern markets. Learn what it is, what Regulation SHO actually requires, the market-maker exemption, and how to read the controversy without the myths.

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Cost to Borrow

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Naked Short Selling

Cost to Borrow

Appears in these guides

Related terms

Related lessons

Naked Short Selling