Why am I charged borrow fees after closing my short stock position?

This error message will appear in the Order Preview window when submitting a short sale order after the order goes through a credit check and it is determined that IBKR will not be able to borrow shares by the trade settlement date.

Additional Information…

Unless you arrange for a pre-borrow, you will not be subject to stock borrow fees if you open and close the short position within the same trading session. When a short stock position is initiated, a locate is performed so as to make a reasonable determination the shares are available to borrow, however, the actual borrow does not take place until settlement (T+1 for U.S. stocks). If an account closes the short position on the same day opened, the sale and purchase will net and settle on the same settlement date, with no borrowing of shares required…

Stock borrow fees begin at the point of short sale settlement, which for U.S. stocks is T+1 (unless you arrange for a pre-borrow, in which case it begins at the date of pre-borrow). Once settled, it is industry convention to charge borrow fees every day including weekends and holidays…

A Long stock position has to be held more than a one year period before a closing trade would be considered a Long Term profit gain or loss.  If you sold a long stock position that you owned for less than one year it would be considered a Short Term gain or loss.  Any Short stock position you hold is borrowed therefore it is always considered to be a Short Term Gain or Loss regardless of when it was opened and then closed…