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Tracking a Short Stock Trade
Have you ever used PortfolioSlicer to track a "Short" stock trading activity? ie: Buy a stock at a given price, and sell it ("cover" the trade) after a few days at a lower price, and have the two transactions report a net positive return?
Could you describe how this might be entered in PS?
Many Regards
Syd
Could you describe how this might be entered in PS?
Many Regards
Syd
Comments
Currently, PS does not support Shor Sales. I had already few requests to add functionality for this, but I believe (maybe wrong?) that there are very few investors who would need that. Am I wrong? Would "Short selling" be useful functionality for PS?
I do a fair amount of Options trading.
As a grasshopper, would NEVER suggest that the master is possibly wrong. But....
It would be good to see this option.
(Perhaps it's time to try a little programing. This could become dangerous - for me).
Would the following concept work?
1. The Purchase of the Stock Short would be "Straightforward". However, I'm guessing it would need a unique name, so that the trade could be tracked uniquely.
2. The "sell", or "cover" trade, would also need to be uniquely named, and connected to the "buy" order.
3. The negative value of the (Buy-sell) should be the returns of the sale, correct?
4. Would this equation work (applicable after the full trade is completed)? (eg: [(-1) x (Buy-Sell)])
I'm just pondering about this at the moment, wondering if this is easy to do.
sk
If you want to do this yourself, first place you would look at is in src worksheet columns X to AS. These columns have table Transaction type that defines how each transaction impacts specific calculations. You will see there values 0, -1 and 1. In most cases 0 means no impact, -1 means negative impact and 1 means positive impact. I have not looked deeply enough to understand if it is enough to extend this table (like adding ShortBuy and ShortSell), and short sale operation might work. I would say there is high chance that additionally you will need to adjust few existing DAX formulas.
If you have time to do this, why not?
Thanks for the great product,
Cichlid
Here is what I'm trying:
1. Enter the Short Position Stock purchase, in the normal manner.
2. Enter the Short Position Stock sale (position close), in the normal manner.
3. The total cash impact of the entire trade is a negative dollar amount. (I determine this value by sorting and hightlighting the cell entries in the "CashImpact" column of the "scrTrans" worksheet.
4. The transaction total is displayed in the "Sum" function value which is usually displaced in the lower right corner of the Excel Window.
5. Correct the Cash balance of the account, by creating a cash "Deposit" transaction equal to [2 x "sum value" x (-1)] that was determined from step #4 (above).
(I'm sure your ideas of "ShortBuy" and "ShortSell" will be a better solution to this transaction type - eventually.)
Anyone knows good website with info on how short sales should be tracked?
I found an Excel spreadsheet which tracks short selling. He also details what each column means.
http://www.tradermike.net/2006/01/my_trading_journal_excel_spreadsheet/
He also directed me to this website:
https://www.stocktrader.com/analysis/
Around the 3 minute mark he explains entering short trades on StockTrader:
I browsed through the shared trades section of StockTrader to find some short selling examples...
https://www.stocktrader.com/analysis/shared/55083742c9f909be68000000
https://www.stocktrader.com/analysis/shared/5502f746c9f909230c000000
https://www.stocktrader.com/analysis/shared/54f89146c9f909ff43000003
Personally, I think PortfolioSlicer allows for better portfolio analysis than StockTrader.
I hope either of these resources are helpful!
I need help in clarifying how ShortSales should be tracked.
So lets say I have following transactions:
In such case does following "Holdings" report makes sense?
Specifically:
1. Qty Held - negative value?
2. Cost Basis - positive value? Or should it be negative?
3. Equity Value - positive value? Or should it be negative? SHould it be amount that is calculates Equity Value - Cost Basis?
4. Capital Gain - my results are not right, should be nagative in this case as stock price went up.
Is there any difference between the transaction types ShortSell and ShortSellTA?
To answer your questions about the Holdings report...
1.) Qty Held - negative value?
Yes. Qty Held should be negative. This would allow users to be able to differentiate long positions (positive quantity held) from short position (negative quantity held).
2.) Cost Basis - positive value? Or should it be negative?
I would recommend making the Cost Basis negative values to ensure consistency throughout the entire row. Having to refer back to the Qty Held column to see if the position is a long or short could get cumbersome.
3.) Equity Value - positive value? Or should it be negative? SHould it be amount that is calculates Equity Value - Cost Basis?
I would recommend making Equity Value a negative value to ensure consistency throughout the entire row.
Also, I view Equity Value and Total Value as being equal to each other...
Equity Value=Total Value=(Quantity Held)*(Current Price)
Equity Value=Total Value=(-10)*(73.50)
Equity Value=Total Value= -735
So for this losing short position (i.e., the stock price went up), the Capital Gain would be calculated like this (assuming you used my suggestions in question #1 and question #2)...
Equity Value=Total Value=(Quantity Held)*(Current Price)
Equity Value=Total Value=(-10)*(73.50)
Equity Value=Total Value= -735
Capital Gain=(Equity Value or Total Value) - (Avg Book Value or Cost Basis)
Capital Gain=(-735) - (-668)
Capital Gain= -67
Let's say the short position was a winner (i.e., the stock price went down). Capital Gain would be calculated as follows...
Equity Value=Total Value=(Quantity Held)*(Current Price)
Equity Value=Total Value=(-10)*(50)
Equity Value=Total Value= -500
Capital Gain=(Equity Value or Total Value) - (Avg Book Value or Cost Basis)
Capital Gain=(-500) - (-668)
Capital Gain= +168
4.) Capital Gain - my results are not right, should be nagative in this case as stock price went up.
Yes. If you have a short position and the stock price increases, then the capital gain should be negative. If you have a short position and the stock price decreases, then the capital gain should be positive.
Thank you. I will work on this and post here more questions if I'll have.
Thanks again!
I looked into this but identified multiple issues that I would have to address, like:
- Cost basis calculation adjustments
- Capital gain calculation adjustments
- Dividend calculation adjustments
- etc
As it is not trivial and I have other priorities, I left this development for later. I am still considering working on this, but I am not sure when.
if you know PowerPivot and DAX - please go ahead and see if you can implement this yourself.
The short position will not receive dividend, because your just borrow these stocks, the stock owner receive the dividend.
I think two TransType should be added to support short sell. one is "Sell to Open" and another is "Buy to Close". Which can distinguish long position and short position, and easy to calculate QtyHeld, cost basis and for long position and short position.
As royoung said, for short position QtyHeld, Cost basis and current market value are all negative value.