How do spot short positions work in Altrady?

A spot short lets you profit from a falling price on a spot market, without using futures. You sell a coin you already own, then buy it back lower, ending up with more of the coin than you started with. Because it runs on the spot market, it behaves differently from every other position type, and that difference is worth understanding before you use it.

If you’ve ended up with a spot short you didn’t mean to open, see why does my position look wrong?.

You need to own the coin first

On a spot market you can only sell what you have, so a spot short starts from base currency you already own and have available. You sell it, receive quote currency, and buy the coin back later. A futures short is different: it doesn’t need you to hold the coin.

How each position type is measured

Spot shorts are the odd one out. For every other position, the size is measured in the base currency and your profit or loss lands in quote. A spot short flips both: your size is the quote you received when you sold, and your profit or loss is in base.

How the position reduces

Your take-profit and stop-loss orders on a spot short are buys: they spend the quote you gained on entry to buy the coin back. So the position reduces by how much of that quote has been spent, not by an amount of base. When the quote from the position is fully spent, the short is closed.

A worked example

Say you hold 1 BTC and the price is $100,000.

• You sell your 1 BTC for $100,000. That $100,000 (less entry fees) is your position size, in quote.
• The price falls to $90,000 and you buy back, spending the $100,000.
• You now hold about 1.111 BTC (less fees): a profit of 0.111 BTC, or +11.11%, measured in base.

The same move as a long (buy at $90,000, sell at $100,000) would give a $10,000 profit in quote. As a futures short (sell at $100,000, buy at $90,000) it’s a $10,000 gain in your account currency, or +10%. Same trade, but where the profit lands, and how the percentage works out, differ.

Closing a spot short cleanly

Closing means buying the coin back, and if you are using market orders, getting the size exact is the tricky part. The position is sized in quote, but the exchange wants a market buy’s size in base, so Altrady has to estimate the base amount, and it can’t know the exact fill price in advance. (A market close is also subject to the exchange’s slippage guards; see market order price protection.) The estimate builds in a small buffer, so a market close lands one of three ways:

• Fill matches the estimate: the quote is spent and the position closes.
• Fill is better than estimated: a little quote is left unspent and the position stays open with no exit order, so you may need to close the small remainder yourself.
• Fill is worse than estimated: the buy needs more quote than the position holds and fails with Insufficient Balance, leaving the position open with no exit order, unless you kept some spare quote in the wallet.

Two things follow from this:

• Keep a little spare quote in your wallet. On many exchanges the buy-back fees come out of quote, so if none is reserved, a take-profit or stop-loss can fail with Insufficient Balance.
• A stop loss on a short sits above your entry (a rising price is your loss), and market stop losses are the ones exposed to the estimate above.

If only dust remains (an amount below the exchange’s step size), Altrady still closes the position automatically.

Using limit exit orders avoids all of this. With a limit order the price is fixed, so the base amount works out exactly and there’s nothing to estimate. So we recommend using regular Take Profit orders rather than Trailing TP, and Limit Stop Loss orders with the limit order 1-3% above the stop price (depending on the expected liquidity).

Still stuck?

If a spot short didn’t close cleanly, or left more than dust, simply buy the rest by adding a TP to the position for the remaining amount.