Short Selling, ETB, and Locate Requests

Last updated: October 22, 2026

You can short sell securities on the easy-to-borrow (ETB) list and securities that aren't on it, where short selling is enabled for your account. For securities that aren't on the ETB list, shares have to be available to borrow. That's checked automatically when you submit the order, so you place the short like any other sell order.

How it works

ETB securities: submit a short sale like any other order.
Securities not on the ETB list: your sell order is held briefly while borrow availability is confirmed, then sent to the market. There's no separate step, and it works the same in the Clear Street app and through the API.
If shares aren't available for the full quantity, the order is rejected, and the rejection message explains why.
One order can't flip your position. A sell order can close a long position or open a short, not both. If you hold 100 shares, a sell order for 150 is rejected. Sell the 100 first, then place a separate order to open the short.

Order rules for securities not on the ETB list

Day orders only. Day, immediate-or-cancel, fill-or-kill, and at-the-close orders are accepted. Good-till-canceled and good-till-date orders are rejected, because borrow availability is confirmed for one trading day at a time.
Sessions: these short sales can be placed in the pre-market, regular, and after-hours sessions (4:00 AM to 8:00 PM ET). They can't be placed in the overnight session. ETB short sales aren't limited by session.
Order types: trailing stop, trailing stop limit, and extended-hours stop limit orders aren't supported for these short sales.
Confirmed shares last one trading day and expire at 8:00 PM ET. Unused shares don't carry over to the next day.
Changing an order doesn't trigger a new check. A modified order can use shares already confirmed for you that day, and it's rejected if it needs more. You can't modify the order while the check is still pending.
Covering frees up those shares for the rest of the day, so you can short the same security again without a new check. The exception is securities on the Regulation SHO threshold list: covering doesn't free them up, so shorting again needs new availability.

Borrow costs

There's no fee for the borrow availability check, and a short opened and covered on the same day has no borrow charge.
Before you submit, the order ticket shows the estimated borrow rate (annualized) and the estimated overnight borrow charge (per day).
Short positions held overnight accrue a borrow charge based on the security's borrow rate. To estimate it: number of shares × price × annual borrow rate ÷ 360. For example, 1,000 shares at $22.50 with a 3.7012% rate is about $2.31 per night.
Borrow rates are indicative and can change daily while you hold the position, so the actual charge can differ from the estimate.

When a security can't be shorted

Some securities can't be shorted on the platform, including some low-float stocks and securities with short-sale restrictions. Orders in these securities are rejected when you submit them.
Borrow availability changes during the day and isn't guaranteed, so shares that are available in the morning may not be available later.
Short selling requires a margin account. Cash accounts can't sell short.

Risks of short selling

Short selling involves substantial risk. If the price rises, your potential loss has no limit.
Borrow rates can rise while you hold a short, so the charge you pay can be higher than the estimate you saw.
Securities on the Regulation SHO threshold list usually have scarce borrow supply. Their borrow rates can move quickly, and short positions in them carry a higher risk of being bought in.
A short position in a halted security keeps accruing borrow charges, even while you can't buy to cover.

For questions about short-selling permissions on your account, or a short sale that was rejected unexpectedly, contact Support.