PREBORROWS.COM

WHAT IS LOCBOX?

LocBox is a web-based stock loan inventory management platform with a corresponding API. LocBox empowers entities to monetize their Hard-To-Borrow inventory by making it available to short sellers in need of Legal Compliant Locates and Preborrows. By providing traders with reliable and verifiable locates, LocBox ensures short sale executions with full compliance, reducing settlement risks and eliminating the possibility of naked short selling. The PreBorrow is the simple solution for the age old problem of Naked Short Selling. This creates a transparent and efficient market, giving traders confidence that their short positions are backed by legitimate inventory.

LocBox is The Only Platform

That Separates Locates from Pre-Borrows

Most brokerage systems and clearing firms do not distinguish between a standard locate and a pre-borrow. That’s a major problem — especially as regulations shift toward mandatory pre-borrow models.

LocBox is the only technology solution built to:

Differentiate true pre-borrows from traditional locates,
Track settlement and delivery risk in real-time,
Enable automated documentation for compliance,
Provide granular visibility into stock loan and borrow behavior.

Whether you’re a broker-dealer, clearing firm, or institutional trader — if you need a platform that aligns with future market structure, LocBox is the tool that keeps you ahead of regulation and risk.

Want to Learn More About Pre-Borrows or LocBox?

Reach out to us to schedule a demo or consultation. Whether you're preparing for regulatory changes or simply want more transparency in your short selling workflow, we’re here to help.

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What Is a Pre-Borrow?

When it comes to short selling, there's a critical but often misunderstood step called a pre-borrow. If you’ve ever wondered what a pre-borrow is, how it’s different from a standard locate, or why it matters — especially in today’s regulatory climate — you’re in the right place.

The Basics: Short Selling and the Role of Borrowing

In a short sale, a trader sells a stock they do not own, hoping to buy it back later at a lower price. But to sell a stock you don’t own, you will need to borrow it.

There are two ways to indicate you are able to borrow the stock:

Locate: The broker identifies a lender likely to have shares available. It’s a “reasonable belief” that the shares can be delivered on settlement.
Pre-Borrow: The trader actually secures and borrows the shares before the short sale is executed. There’s no guesswork — the shares are already reserved.

Why Pre-Borrows Matter

Pre-borrows are essential when:

Stocks are hard to borrow or frequently experience fails-to-deliver.
Traders want to guarantee delivery and avoid financial risk due to the possibility of being forced to close our their short sale.
Firms want to stay compliant with short sale regulations, specifically pertaining to Reg SHO Threshold Securities.

Pre-borrows reduce market risk, prevent settlement failures, and enhance transparency.