If you’ve dabbled in share trading or short selling, you may have heard the term “hard-to-borrow list” thrown around by brokers or in trading forums. In Australia’s fast-evolving markets, understanding this list is becoming increasingly important, especially with recent ASX rule tweaks in 2025. Whether you’re an active trader or a curious investor, knowing how the hard-to-borrow list works can help you avoid costly surprises and make smarter decisions.
What Is a Hard-To-Borrow List?
The hard-to-borrow (HTB) list is a catalogue maintained by brokers or clearing houses that identifies stocks which are difficult to borrow for short selling. When a stock appears on this list, it means there’s limited availability for borrowing shares to sell them short, often due to high demand from short sellers or a small public float. In Australia, the ASX and major brokers update these lists daily, reflecting real-time market dynamics.
- Short sellers must check the HTB list before placing trades, as restricted stocks can be expensive or impossible to borrow.
- Brokers may charge higher borrowing fees for HTB stocks, reflecting the increased risk and scarcity.
- Investors holding HTB shares may see increased volatility as short squeezes become more likely.
For example, in early 2025, lithium mining shares like Core Lithium and speculative tech stocks frequently appeared on HTB lists due to high short interest and limited liquidity.
Why Do Stocks End Up on the Hard-To-Borrow List?
Stocks can land on the HTB list for several reasons:
- Heavy short interest: When many traders want to bet against a stock, available shares for borrowing dry up quickly.
- Low float or thin trading: Companies with fewer shares in public hands—think small caps or tightly-held IPOs—are more likely to be HTB.
- Corporate actions: Events like takeovers, buybacks, or trading halts can make shares unavailable for lending.
In 2025, new ASX regulations require brokers to provide more transparency about which stocks are on their HTB lists and to notify clients immediately when a borrowed stock becomes unavailable. This is a response to several high-profile short squeezes in 2024, where retail traders were caught off guard by sudden borrowing restrictions.
How the Hard-To-Borrow List Impacts Australian Traders
Being on the HTB list can have real consequences for both short sellers and long-term investors:
- Short sellers may be unable to initiate new positions or forced to close existing ones if stocks become “unborrowable”. This can trigger sharp price spikes (short squeezes) as traders rush to buy back shares.
- Brokers are now required by ASIC to provide upfront borrowing cost estimates for HTB stocks, which in 2025 can exceed 20% annualised for some volatile names. Compare that to less than 2% for commonly borrowed blue-chips.
- Long-term holders can benefit from lending out their shares through broker programs, earning higher lending fees when their stocks are in high demand.
For instance, in February 2025, Liontown Resources briefly topped several brokers’ HTB lists after a negative analyst report, sending borrowing rates surging and resulting in a two-day price spike as short sellers scrambled to cover their positions.
2025 Policy Updates: What’s New for Investors?
This year, ASIC and the ASX rolled out enhanced disclosure requirements around securities lending and HTB designations. Key 2025 changes include:
- Mandatory daily publication of broker HTB lists for all ASX-listed securities
- Real-time alerts to clients when a borrowed stock is recalled or becomes unavailable
- Stricter controls on “naked” short selling and penalties for non-compliance
These reforms aim to level the playing field, giving retail investors the same transparency as institutional traders. If you’re short selling or considering lending your portfolio, it pays to keep a close eye on these lists and stay informed about your broker’s policies.
Conclusion: Stay Ahead in a Tighter Market
The hard-to-borrow list is no longer a niche concern—it’s a key risk factor for active Australian investors in 2025. With new transparency rules, both short sellers and long holders can make more informed decisions and potentially profit from changing market dynamics. As always, keeping an eye on HTB updates and understanding your broker’s rules can help you avoid nasty surprises and turn market volatility to your advantage.
