How to Handle Short Positions in Fund Manager

To record a short position, simply record a sell transaction first.  While the short position is open you will own a negative number of shares.  If the share price of the security goes down, your investment value will become less negative, thus the value will be increasing.  When the position is closed, record the corresponding purchase.

To keep your total portfolio value correct, use the default cash account option and transfer the proceeds of your initial sell into your cash investment.

Example Short Position

Assume we've shorted 100 shares of IBM at $90/share.  Record a sell of 100 shares at $90 in a IBM investment.  Assume you've specified a default cash account under the Portfolio Properties Dialog called CASH.  Your cash account will increase in value by $9000.  The total change in your initial portfolio value is $0, as the value of your IBM investment is $ -9,000.  If IBM goes down to $80/share, your portfolio will increase in value by $1,000, as the cash account still has a plus $9,000 value, and the IBM value will have increased to $ -8,000.  When you close the short position, record a purchase of 100 shares of IBM, for the amount you paid to buy back the originally shorted shares.

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