What Makes a Stock “Hard-to-Borrow”?

A stock becomes "hard-to-borrow" when the demand for shorting it exceeds the available supply of shares for lending. This can happen for several reasons: the company may have a small number of publicly traded shares (a small float), a large portion of its shares may be held by insiders or institutions unwilling to lend, or there may be intense speculative interest from many traders wanting to bet against the stock.

When a stock is hard-to-borrow, brokers will charge a much higher borrowing fee, and in some cases, may not have any shares available to short at all.