I’ve got a long position of 1 on the asset NCNC. I’m trying to sell it, i.e.
side="sell", but it gives me the error “Asset ‘NCNC’ cannot be sold short”. I did this using the python library
alpaca_trade_api (paper trading), however I could replicate the problem in the UI (see image). This is not the only asset that I cannot sell my long position for. It seems like the
'shortable': False attribute is stopping me from reducing the quantity of my long positions. Am I missing the point? How else can I do that?
@Merijn The error
"Asset ‘NCNC’ cannot be sold short" implies the account has 0 shares of NCNC. When an account has 0 shares, and one places an order to sell, the system assumes one wants to go short that many shares. But, in this case NCNC is not ‘shortable’ which is why the error. Note if one had, for example 10 shares and then tried to sell 11 shares, the error would be something like
"insufficient qty to sell". The difference in those error messages is the reason to infer the system thinks the account currently has 0 shares.
Why would the system think there is 0 shares but, in this case, there is 1 share of NCNC? The answer stems from paper trading accounts not being updated for corporate actions. While paper accounts act much like live accounts, this is one important difference. In this case, NCNC had a merger effective August 28, 2023. The shares trading under the symbol NCNC before that date were actually different shares from those trading after (ie they have different CUSIP numbers). In live trading this corporate action would have been handled seamlessly by replacing any original shares of NCNC with the new shares of NCNC. However, since paper accounts do not implement corporate actions, the account still reflects the original shares of NCNC. When one tries to sell NCNC, the system tries selling the new NCNC shares which the account doesn’t hold, then thinks one is trying to go short, and therefore the error message
"Asset ‘NCNC’ cannot be sold short".
Many corporate actions result in a symbol change so it’s a bit more obvious what is going on (ie one sees an old symbol in the account). However, in cases where the symbol remains the same (even though actually two separate assets), it is less obvious.
The only “fix” to removing any obsolete symbols such as NCNC is to reset the account.
Hope this all makes sense.
Thank you for your elaborate explanation. Good to know that I don’t have to anticipate on this in my live account.