Not All “Hard-to-Borrow” Situations Are Created Equal
Two securities can carry the same hard-to-borrow label while presenting very different risk profiles.
In one case, supply may be structurally limited but stable. In another, borrow may rely on a small number of lenders with a high probability of recall. Headline labels do not capture these distinctions.
Understanding the source and stability of supply matters more than the classification itself. Borrow risk is qualitative before it is quantitative.
