Borrow fee, sometimes called short rate, is the annualized cost of borrowing shares to sell short. The fee rises when shares are hard to borrow, float is tight, or short demand becomes crowded.
Why it matters
Borrow fee helps investors judge whether a short position is comfortable or stressed. A very high fee can force short covering and raise squeeze risk, especially in small floats.
Use it with the Short-Interest Change Playbook and Float vs. Outstanding Shares when you want to understand whether bearish positioning is becoming unstable.
How to interpret it
- Rising short interest plus rising borrow fee often means the short side is getting crowded.
- Falling fee while short interest stays high can mean shorts still have room to hold.
- Sudden fee changes after issuance, tenders, or float changes can alter squeeze risk quickly.
Practical use
Borrow fee is not a valuation metric. It is a positioning and liquidity signal. Investors usually pair it with short-interest trends, catalyst risk, and volume behavior rather than using it alone.