Tracking Short Positions

A short position is simply a position with a negative quantity. In the stock market, shorting means selling shares you don't own (borrowed from your broker) with the intention of buying them back later at a lower price. In Capitally, any asset can have a negative balance, which makes tracking shorts straightforward.

How to open a short position?

You don't need to do anything special to track shorts. The key concept is simple: a short position is any position where the quantity goes below zero. This happens when you sell an asset before you own it.

There are two ways to open a short position:

• Add a Sell transaction with a positive quantity (on an asset you have zero balance on)
• Add a Buy transaction with a negative quantity

Both methods achieve the same result — a negative quantity that represents your short position.

How to Close a short position?

To close a short, you do the reverse of what you did to open it:

• If you opened with a Sell, close with a Buy
• If you opened with a Buy (negative quantity), close with a Sell (negative quantity)

When you buy back the shares, your position returns to zero (or positive if you buy more than you shorted).

Return calculations for shorts

Returns are calculated correctly for short positions, taking into account the inverse price relationship. When the price rises, your short position loses money; when the price drops, you profit. This calculation integrates properly with the rest of your portfolio, including IRR and other performance metrics.

Beyond stocks: other uses for negative balances

The same negative balance mechanism works for any asset type in Capitally. This makes it useful for tracking:

• Short stocks and ETFs — the classic short-selling scenario
• Mortgages and loans — track what you owe as a liability (see Tracking Debt)
• Margin accounts — track borrowed cash or securities
• Any liability — anything you owe can be represented as a negative position

Monitoring your shorts and liabilities

The Market Value tab includes an Owed chart that visualizes the relationship between what you own and what you owe, plus the following metrics:

• Owned — the total value of your assets
• Owed — the total value of your liabilities (short positions, loans, etc.)
• Debt Ratio — shows how leveraged you are, calculated as owed/owned

This gives you a clear picture of your net position and overall exposure.

If you're actively trading options or shorting stocks, check out the margin tracking features to monitor your margin requirements and avoid margin calls.