What is the Easy-To-Borrow List
The easy-to-borrow list of securities is deemed to be readily available for borrowing in short selling transactions because their delivery is assured. Availability is usually due to their accessible nature and/or high number of outstanding shares, which is often called a stock's float.
BREAKING DOWN Easy-To-Borrow List
Also known as a blanket or standing assurances by members or associated persons, this easy-to-borrow list is updated every 24 hours. It gives firms the ability to transact short sells more readily, as they aren't required to research the availability of a stock every time it is requested for a short sale transaction. Instead, they can assume that stocks on the list are readily available.
In contrast to the easy-to-borrow list, many brokers also maintain a hard-to-borrow list. These securities are naturally more challenging to borrow for short sale motivations. Often, a security may be on the hard-to-borrow list because it is in short supply or because of the stock's volatile price. Compared to securities on an easy-to-borrow list, hard-to-borrow securities almost always come with more fees for access to the securities.
The easy-to-borrow list offers no information as to whether a security is over or underpriced, as opposed to other recommendation lists brokers keep, but rather, it's a measure of anticipated liquidity or availability for potential short sellers. Brokerage houses with a deeper lineup or menu of services will often have a more extensive list of securities that are easy to borrow. Naturally, institutional investors, such as a hedge fund, often seek near-immediate access to short sale opportunities, given the small window of time their information is useful for.