Short-Selling Profit & Stock Borrow Fee Calculator
Calculate short trade net profits, hard-to-borrow interest rates, Reg T margin collateral requirements, and short squeeze break-even exit prices.
Mechanics of Shorting Stocks and Hard-to-Borrow Rates
Short selling involves borrowing shares from a broker to sell immediately, aiming to buy them back later at a lower price. Short sellers incur daily interest fees for borrowing shares, especially on hard-to-borrow (HTB) stocks with high short interest.
Short Profit and Interest Cost Equations
Gross Short Profit = (Short Sale Entry Price − Cover Purchase Price) × Share Quantity. Daily Borrow Fee = (Position Notional Value × Annual Borrow Rate %) ÷ 365. Net Short Profit = Gross Short Profit − Total Borrow Fees − Commissions.
Frequently Asked Questions
What is a short squeeze risk?
A short squeeze occurs when rising stock prices force short sellers to buy back shares to cover losses, driving prices higher rapidly.
How much collateral is required to short sell?
Federal Regulation T requires a 50% initial margin deposit of the short position notional value.