- Betting against some company stocks can be more expensive than owning them.
- Clovis Oncology, currently the most expensive stock to short, boasts a 109% borrow fee according to data from S3 Partners, a financial analytics firm.
- Here are the top 13 stocks with the highest borrow fees, according S3 Partners.
- Read more on Business Insider.
Short selling, or the practice of betting that a stock's price will fall instead of rise, can be an expensive business.
That's because the price to borrow shares of some stocks can be more expensive than owning them, data show. For example, traders are currently paying a 109% borrow fee to short shares of Clovis Oncology, according to data from financial analytics firm S3 Partners.
That fee has put Clovis Oncology at the top of the most expensive short list. The company surged into the top spot after its fee jumped 69% in the last two weeks, Ihor Dusaniwsky, the managing director of predictive analytics at S3, wrote in a Tuesday note.
It's likely that the stock's borrow fee could climb even higher, Dusaniwsky said. "New stock borrows are going at over 400% fee today as there are very few shares left to borrow. CLVS stock loan recalls are also hitting the street in size," he wrote.
Borrow fees can be detrimental to traders betting against costly stocks. "High stock borrow costs can eat into expected Alpha making an attractive trade fall below investment thresholds," Dusaniwsky wrote. "Or an unexpected increase in borrow rates can turn a home-run trade into a run of the mill single."
Fees can be hundreds of thousands or even millions of dollars each day. Currently, traders are paying more than $1 million per day in short financing costs on the stock, according to S3.
While right now, it's the only stock that costs more than $1 million per day to bet against, that could change soon, said Dusaniwsky.
Two other companies on the list, Nio and Canopy Growth, are seeing borrowing costs rise. "There will probably be a triumvirate of $1 million borrows in the very near future," Dusaniwsky wrote. In addition to Canopy Growth, four other cannabis companies are on the most expensive shorts list— Tilray, Hexo, Aurora Cannabis, and Aphria.
Here are the top 13 stocks with the most expensive borrow fees, ranked from least to most expensive according to S3 data.
13. Canopy Growth

Ticker: CGC
Short interest: $775 million
% float: 20%
Borrow fee: 35%
Source: S3 Partners
12. Ballard Power Systems

Ticker:BLDP
Short interest: $56 million
% float: 5%
Borrow fee: 38%
Source: S3 Partners
11. Aphria

Ticker: APHA
Short interest: $167 million
% float: 15%
Borrow fee: 44%
Source: S3 Partners
10. Sorrento Therapeutic

Ticker:SRNE
Short interest: $64 million
% float: 18%
Borrow fee: 48%
Source: S3 Partners
9. Aurora Cannabis

Ticker:ACB
Short interest: $410 million
% float: 17%
Borrow fee: 52%
Source: S3 Partners
8. AMC Entertainment

Ticker:AMC
Short interest: $252 million
% float: 58%
Borrow fee: 55%
Source: S3 Partners
7. McDermott International

Ticker:MDR
Short interest: $95 million
% float: 68%
Borrow fee: 56%
Source: S3 Partners
6. Hexo

Ticker:HEXO
Short interest: $73 million
% float: 14%
Borrow fee: 57%
Source: S3 Partners
5. Nio

Ticker:NIO
Short interest: $514 million
% float: 28%
Borrow fee: 59%
Source: S3 Partners
4. Inmode

Ticker:INMD
Short interest: $103 million
% float: 18%
Borrow fee: 64%
Source: S3 Partners
3. Cel-Sci Corporation

Ticker: CVM
Short interest: $50 million
% float: 20%
Borrow fee: 66%
Source: S3 Partners
2. Tilray

Ticker:TLRY
Short interest: $162 million
% float: 39%
Borrow fee: 67%
Source: S3 Partners
1. Clovis Oncology

Ticker:CLVS
Short interest: $468 million
% float: 55%
Borrow fee: 109%
Source: S3 Partners