After posting lists of the most expensive stocks to borrow and short, I thought that it would be valuable to post a list sorted by the revenue that each stock is generating in the securities lending market. To calculate revenue, I've simply multiplied the market value on loan for each stock by the average fee that brokers (and hence hedge funds) must pay to borrow (and short).
Many blue-chip stocks have very high loan balances because institutions use them as collateral to borrow cash. This is why the securities lending market is also known as the equity finance market.
Many other small-cap stocks have very high average fees, yet because there's not much supply out there, there's no opportunity for most investors to short.
I hope that this list shows the most popular short plays, in that the average fees are relatively high, and the balances that brokers are borrowing are high as well.
The top stock on this new list is AIG. With almost $1 billion worth of AIG stock on loan in the securities lending market, and an average fee in the double-digit percentage points, the daily revenue from lending AIG is substantial. Is there necessarily a reason to short AIG just because it's on this list? No. But I hope that people can use this list to get some new ideas.
|Name||Ticker||Change in cost-to-borrow (bps)|
|AMERICAN INTL GROUP INC||AIG||396|
|SEARS HLDGS CORP||SHLD||63|
|ST JOE CO||JOE||-1,815|
|FIRST SOLAR INC||FSLR||22|
|CHINA MEDIAEXPRESS HLDGS INC||CCME||189|
|RUBICON TECHNOLOGY INC||RBCN||-667|
|AVANIR PHARMACEUTICALS INC||AVNR||941|
|MAGNUM HUNTER RES CORP DEL||MHR||615|
|FEDERATED INVS INC PA||FII||86|
|STAR SCIENTIFIC INC||CIGX||-109|
|BRIDGEPOINT ED INC||BPI||492|
|DIGITAL RLTY TR INC||DLR||-120|
|LIFE PARTNERS HOLDINGS INC||LPHI||2,642|
|ALPHA NATURAL RESOURCES INC||ANR||0|
|YONGYE INTL INC||YONG||3,684|
|CHINA SHEN ZHOU MNG & RES IN||SHZ||3,399|
|CHINA AGRITECH INC||CAGC||421|
|YRC WORLDWIDE INC||YRCW||916|
|CHINA GREEN AGRICULTURE INC||CGA||2,371|
|VEECO INSTRS INC DEL||VECO||-1|
|SOMAXON PHARMACEUTICALS INC||SOMX||1,375|
|CLEAN ENERGY FUELS CORP||CLNE||530|
|BARNES & NOBLE INC||BKS||181|
|APRICUS BIOSCIENCES INC||APRI||4,677|
|BANK MONTREAL QUE||BMO||96|
|DELCATH SYS INC||DCTH||597|
|EVERGREEN SOLAR INC||ESLR||1,117|
|ATP OIL & GAS CORP||ATPG||-21|
|EDUCATION MGMT CORP NEW||EDMC||9|
|TANZANIAN ROYALTY EXPL CORP||TRE||-420|
|URANIUM ENERGY CORP||UEC||-23|
|RITCHIE BROS AUCTIONEERS||RBA||-35|
|FEIHE INTL INC||ADY||836|
|NYMOX PHARMACEUTICAL CORP||NYMX||3,313|
|ROYALE ENERGY INC||ROYL||1,164|
|BSD MED CORP DEL||BSDM||43|
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