At Cobra Trading, we focus on people, passion for trading, and platforms. This is why we want to make sure that our fee structure is as transparent as possible.
As a swing trader, you may have to deal with two different fee structures for holding stock overnight. They are called locate multiplier and short interest fee models.
The locate multiplier fee model is very straightforward in the way it favors the broker. Whatever you pay to borrow the shares, the firm decides to charge a multiplier from 1 to 7. So if you pay 3¢ a share, and the multiplier happens to be 7, you’ll end up paying 21¢ per share to be able to hold the stock overnight.
At Cobra, we prefer to utilize the short interest fee model because this is the more fair fee structure. So if you are a swing trader who goes short and holds shares overnight regularly, you will often pay less with this fee model.
We calculate the fee using the following formula:
(Shares x Close $ x Short Interest Rate) / 360
We take the number of shares you’re planning to hold, multiply it by the stock’s closing price, and then multiply it by the short interest rate (we can disclose the short interest rate once you reach out to us on the live chat feature). Then, once you have the total, you divide it by 360. That’s going to be your cost of keeping the shares overnight.
If you reach out to us, we’ll be happy to tell you the Short Interest Rate; we’ll even calculate the fee for you as well. All you need to know is how many shares you’d like to hold.
In practice, this price turns out to be significantly lower than the one calculated by the locate multiplier model. With this fee model, you don’t need to overpay for exactly the same service. At Cobra Trading, we are committed to helping you succeed as a day trader. This is why we are willing to provide free borrows whenever possible and charge a lower fee for holding shares overnight.
If you are a swing trader, Cobra Trading may be the best broker for you. Contact us if you’re interested in opening an account, and our customer support team will answer any questions you may have!