Reversing a position with a single order in an AddOn

[carnitron]

If I am long a single share, and I decide I want to be short a single share, is there a consensus/best practice way to do that with a single order? Does the answer vary by provider?

For instance, if I am long 1 share, can I sell 2 shares to be short a share?

I currently sell out and then short with two sequential orders, but that introduces latency I'd like to avoid if possible.

Before I spend time experimenting with what may or may not work, I figured I'd ask to see if there is a time-saving easy answer from someone.

This is via C# code from within an AddOn.

Cheers.

(I originally posted this question to Platform Technical Support, but the help I have gotten so far seems to imply this is a better place for this question.)

[NinjaTrader_ChelseaB]

Hello carnitron,

Yes, you could place an order with a quantity of 2 to reverse the position.

I recommend giving this a test manually using Chart Trader on the Sim101 or Demo account.

[carnitron]

Thank you Chelsea! Your clear, concise answer is greatly appreciated. I will investigate this.

[carnitron]

So, in the UI, with a TDA Sim account, I tried entering with a single share via market or limit order and then selling 2 shares with market or limit orders and everything worked as hoped. Selling 2 shares while being long 1 share resulted in being short 1 share.

However, when I attempt to do this against my real live TDA account, it does not work. Instead, I get this dialog, which blocks the order:



Questions:

1) Is there a way around this restriction in the live account? (Technically, I only actually care about the AddOn API, not whether I can do this in the UI.)
2) Does this vary by vendor? Like maybe TDA imposes this restriction, but other brokers do not? If so, do you have a list of which brokers support or do not support reversals like this?

Thanks in advance for any help you can provide here. Cheers.

[NinjaTrader_ChelseaB]

Hello carnitron,

The message is likely telling you the account is not allowed to have a short position.

"Is there a way around this restriction in the live account? "
You would need to contact TDA your broker for any information about your account, or to change the account settings so that the account is allowed short positions.

"Does this vary by vendor? Like maybe TDA imposes this restriction, but other brokers do not?"
Yes, this would vary by broker and the specific account settings.

"If so, do you have a list of which brokers support or do not support reversals like this?"
I do not have a list of brokers and would not be able to provide any specifics about accounts that you would need to talk to the broker about.

NinjaTrader Brokerage (a futures brokerage) does allow for short positions with proper margin requirements.

[carnitron]

My account supports short positions. Here is a picture from live just now showing it:



I think I have seen errors of this nature in other clients as well. Some will complain about boxed positions, even though that's not the intent.

Further thoughts? What is my best path forward here? Call various API support teams at different brokers and find out which ones support this operation?

I will email TDA's API support, as this is a question they might actually be able to answer, heh.

[NinjaTrader_ChelseaB]

Hello carnitron,

If the account allows for short positions you will need to call your broker to ask why your broker has rejected the order.

[carnitron]

Ok I will do that and report back.

[ClarissaGalloway]

I recently had the same problem and found that using just one order to flip my position made things faster and smoother for my trading. It's definitely a good idea to play around with what your trading platform can do or to ask their support team if you can do this with what you've got set up.

[carnitron]

So TDA phone support has told me to email TDA API support b/c there is a setting "Auto Position Effect" that they need to turn on for my account. I have sent the email. We'll see how fast they get back to me and I can get into a position (no pun intended) where I can test the results.

Thanks for the feedback Clarrissa. I definitely feel you here, there is a pretty important class of signal scenarios in front of me here that I suspect I can turn from red to green with this one change, heh. We shall see!

[ClarissaGalloway]

My pleasure! But keep us updated with their respond.

[carnitron]

TDA got this in for me today and I confirmed that doing this at the UI level now works as expected. Confirming down at the API level will require some work for me, but it's probably reasonable to assume that it works, since it was an issue at the broker level to begin with. Apparently this is a safety feature to prevent less experienced traders from making mistakes and getting confused. On the upside, TDA does not then turn your single reversal order into two orders under the covers -- it is kept as a single order all the way through to the clearinghouse, preserving the latency benefits through the entire transaction. So, a happy ending!