How are loans allocated among clients when the supply of shares available to lend exceeds the borrow demand?

When you sell stock short, IBKR must locate and borrow shares to make delivery to the purchaser at settlement. Specific cost to borrow those shares depends upon the supply of shares available to borrow and the demand from other short sellers to borrow shares…

ACCESS SHORT SECURITIES (SLB) AVAILABILITY TOOL

When you short sell a stock, IBKR must locate and borrow shares to make delivery to the purchaser at settlement. Whether or not there is a cost to borrow those shares depends upon the supply of shares available to borrow and the demand from other short sellers to borrow shares…

Utilization is defined as loaned shares divided by available shares in the securities lending market, expressed as a percentage. Utilization can be interpreted as a ratio of demand to supply. For example, Apple Inc. (AAPL) may have utilization of less than 1% because lenders have vast inventory relative to the demand of borrowing AAPL shares for shorting. A less liquid stock may have utilization above 90% because lenders’ available inventory to satisfy borrower demand is limited…

In the event that the demand for borrowing a given security is less than the supply of shares available to lend from participants in our Stock Yield Enhancement Program, loans will be allocated on a pro rata basis (e.g. if aggregate supply is 20,000 and demand is 10,000, each client will be eligible to have 50% of his/her shares lent)…