Some custodians do not specify in their files whether an option transaction is short. This causes issues when reconciling because short transactions may import in with a long transaction type. Note: These out of balances are easiest to fix in the import blotter before the transactions are posted.
You will have two OOB with this issue.
In the Position Type column, one will say ‘Long’ and one will say ‘Short’ for the same holding within the same account.
If the short position was just opened at the Custodian, then the ‘Short’ line item will have a value in the Custodian Position (Shares) column, while the ‘Long’ line item will have a 0 value in the Custodian Position (Shares) column.
If the short position was just closed at the Custodian, then the ‘Short’ & ‘Long’ line items will have a 0 value in the Custodian Position (Shares) columns.
Example: Sell Short (short position) coming in incorrectly as a Sell (long position) transaction or Deliver-in (short position) coming in incorrectly as Deliver-out (long position). In this example, the transactions have not been posted yet; the shares in the ‘Long’ line item are showing under the Morningstar Pending Transactions (Shares) column. These OOBs are easiest to fix when the transactions are pending.
Click on the magnifying glass under the View Transactions column associated with the Long line item.
You will see a Sell under the transactions. This should be a Sell Short.
Click on Sell under the Transaction Type column. Click on the drop down arrow that appears and choose Sell Short from the list.
Note: If you have this issue in many accounts, refer to Handling Long/Short issues in the Blotter for many transactions for instructions on handling this in bulk.
Click ‘Yes’ when prompted to re-reconcile. Those two line items will be removed.
Click on the magnifying glass under the View Transactions column associated with the Long line item.
You will see a Buy under the transactions. This should be a Cover Short.
Click on Buy under the Transaction Type column. Click on the drop down arrow that appears and choose Cover Short from the list.
Note: If you have this issue in many accounts, refer to Handling Long/Short issues in the Blotter for many transactions for instructions on handling this in bulk.
Click ‘Yes’ when prompted to re-reconcile. Those two line items will be removed.
If you’ve transferred an account with options, what should come in as a Deliver-in (Short) may come in as a Deliver-out (Long).
You will have a Long/Short OOB in your Failed Reconciliation Blotter.
From the blotter menu on the left, click on Transactions.
Find the Deliver-out transaction. Click on Deliver-out under the Transaction Type column. Click on the drop down arrow that appears and choose Deliver-in from the list.
On the grid, scroll over to the right until you reach the Position Type column. This will say Long. Click on Long and choose Short from the drop down menu.
Note: If you have this issue in many accounts, refer to Handling Long/Short issues in the Blotter for many transactions for instructions on handling this in bulk.
Click Save and then click Reconcile.
If you have many transactions that need changed, you can change them from the Transactions Blotter. This may be faster than changing the transactions from the Failed Blotter.
From the blotter menu on the left, click on Transactions.
Find the incorrect transactions. Click in the Transaction Type field and use the drop-down menu to select the correct transaction type.
Note: If you have a lot of transactions that need changed, you can copy and paste the transaction type in this field.
Click Save once you’ve changed all your transaction types that need changed and click Reconcile.
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