No Stock Available” for ETF Short Trades?
Like so many other investors, for a long period we followed only the major ETFs–the Nasdaq 100 (AMEX:QQQQ – News), the SPDR 500 (AMEX:SPY – News), and the iShares Russell 2000 (AMEX:IWM – News)–and shorting these highly liquid funds was both easy and routine. We at the ETF Digest relied upon the representations from all promoters that all ETFs were shortable. Some time ago, we issued our first short recommendation for any ETF in a long time – the Lehman 20 Year Treasury Bond Fund (AMEX:TLT – News). Although I was able to implement this transaction through my broker, subscriber feedback indicated that a significant number of them were unable to make this transaction. These individuals were working with a wide variety of well-known online brokerage firms, and were routinely told that there was “no TLT stock available” for shorting.
