Shorting Prevention Breaking Change Notification

Current Issue and Customer Impact

Outside of market hours, fractional* trading customers were able to sell more shares than they own in their accounts, resulting in an unintentional short position. This was an issue that only occurred outside of market hours and has happened with notional and quantity based orders of the same security.

In order to prevent mixed notional and quantity sell sequences outside of market hours, we will introduce a breaking change.

Solution and Breaking Change

We have adjusted the order acceptance criteria outside the market session so customers don’t end in a net short position.

Starting on October 27, 2021, customers will not be able send the following sequence of orders outside of market hours:

Release Timeline

We plan for this change to take effect in the Trading API and Broker API live environments starting on October 27, 2021. For Paper Trading and the Broker API sandbox environment, we plan to enable this change on October 13, 2021. We’ll ensure that our SDKs are updated as well.

We understand the change may impact your client code but hope it will provide a better experience. Thank you for your understanding and please feel free to send any questions to [email protected].

*Alpaca does not make recommendations with regard to fractional share trading, whether to use fractional shares at all, or whether to invest in any specific security. A security’s eligibility on the list of fractional shares available for trading is not an endorsement of any of the securities, nor is it intended to convey that such stocks have low risk. Fractional share transactions are executed either on a principal or riskless principal basis, and can only be bought or sold with market orders during normal market hours.

Brokerage services are provided by Alpaca Securities LLC ("Alpaca"), member FINRA/SIPC, a wholly-owned subsidiary of AlpacaDB, Inc.

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