you would have the following journal entries:
a. Short Sale Transaction:
* Debit: Cash (Asset) $2,613.68
* Credit: Short Sale Liability (Liability) $2,613.68
b. Borrowed Margin Loan:
* Debit: Margin Deposit (Asset) $1,175.16
* Credit: Loan Payable (Liability) $1,175.16
$3,789.83 is the total liability for you including borrowed stock and margin
loan. (Total borrowing cost will be $ 473.72 per stock)
Saludos Cordiales
Murugan
________________________________
From: gnucash-user
<gnucash-user-bounces+m.muruganandam=hotmail....@gnucash.org> on behalf of
Mattia Rizzolo <mat...@mapreri.org>
Sent: 15 November 2024 18:27
To: gnucash-user@gnucash.org <gnucash-user@gnucash.org>
Subject: [GNC] properly record short-selling
Hello people,
For the first time since I started using gnucash 3+ years ago, I'm now
shorting on a stock. Nice how I refrained from excessive speculation
for 3+ years hah!
So, I started with
Assets:Banks:USD +$1,274.26
Assets:Investments:Stocks USD:TSLA 0
And what is clear from my bank statements is:
* I sold 8 TSLA stocks for $326.71 each, tot 2,613.68, minus $3.94 fee,
so I have a +$2,609.74 in A:Banks:USD
* this is operating on a 45% margin, and shows a "margin amount" of
$1,176.16
* to cover the rest, apparently I borrowed 2,459.01 EUR according to
the statement, go figure what's that in USD
* this being a bank, they are not just happily loaning me shares
without any insurance, so I have a -$3,789.83 on my statement. But
where is that number coming from? It looks suspiciously close to what
2,459.01 EUR + 1,176.16 USD would look like.
* it *seems* those 8 shares I borrowed for the operation are valued
$473.7295 each, total $3,565.57 — I'm seriously confused about where
that figure is coming from, but it's listed in the stock transactions
list with the note "lending". (note: I get what short selling is all
about, I'm only confused about where that $473 figure comes from).
At the end of it all, the bank gives me a balance of +$94.17 and -8
shares.
How do you recommend I record all of the above in gnucash?
For long positions it's a fairly straightforward
Assets:Banks:USD +$1234
Liabilities:Loans:Margin Trading:USD -$1234
Assets:Banks:USD -$3456
Assets:Investments:Stocks USD:whatever +$3456
But clearly it's not _that_ straightforward for shorts.
Would people normally create a Liabilities accounts for the asset loan
(with the counter-account being the regular stock account under Assets)?
Or would you just let the A:I:Stocks account go negative while the
position is open?
And how do you even start recording the cash that has been loaned just
to cover the position?
If anybody is able to make heads and tails of this situation, I would
really appreciate it!
--
regards,
Mattia Rizzolo
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