From 621d3a91203e140e32a30696c6c5c7fcc10b2b1b Mon Sep 17 00:00:00 2001
From: Mike Johnston <mike@nervesocket.com>
Date: Fri, 20 Mar 2026 13:26:22 -0400
Subject: [PATCH] try to fix shorts/bankruptcy

---
 src/app/api/admin/users/[userId]/reset/route.ts | 7 ++++++-
 src/app/api/user/me/reset/route.ts              | 7 ++++++-
 src/lib/pricing.ts                              | 8 ++++++--
 3 files changed, 18 insertions(+), 4 deletions(-)

diff --git a/src/app/api/admin/users/[userId]/reset/route.ts b/src/app/api/admin/users/[userId]/reset/route.ts
index c549502..a7d7990 100644
--- a/src/app/api/admin/users/[userId]/reset/route.ts
+++ b/src/app/api/admin/users/[userId]/reset/route.ts
@@ -84,7 +84,12 @@ export async function POST(
           data: { userId: params.userId, type: 'ACCOUNT_OPEN', shares: 0, price: 0, total: STARTING_BALANCE, profit: STARTING_BALANCE },
         }),
       ]
-    : [prisma.trade.deleteMany({ where: { userId: params.userId } })]
+    : [
+        prisma.trade.deleteMany({ where: { userId: params.userId } }),
+        prisma.trade.create({
+          data: { userId: params.userId, type: 'ACCOUNT_OPEN', shares: 0, price: 0, total: STARTING_BALANCE, profit: STARTING_BALANCE },
+        }),
+      ]
 
   await prisma.$transaction([
     ...fundUpdates,
diff --git a/src/app/api/user/me/reset/route.ts b/src/app/api/user/me/reset/route.ts
index 689a9b5..3bf92f9 100644
--- a/src/app/api/user/me/reset/route.ts
+++ b/src/app/api/user/me/reset/route.ts
@@ -86,7 +86,12 @@ export async function POST(req: NextRequest) {
           data: { userId, type: 'ACCOUNT_OPEN', shares: 0, price: 0, total: STARTING_BALANCE, profit: STARTING_BALANCE },
         }),
       ]
-    : [prisma.trade.deleteMany({ where: { userId } })]
+    : [
+        prisma.trade.deleteMany({ where: { userId } }),
+        prisma.trade.create({
+          data: { userId, type: 'ACCOUNT_OPEN', shares: 0, price: 0, total: STARTING_BALANCE, profit: STARTING_BALANCE },
+        }),
+      ]
 
   await prisma.$transaction([
     ...fundUpdates,
diff --git a/src/lib/pricing.ts b/src/lib/pricing.ts
index 6259031..bdc1b9e 100644
--- a/src/lib/pricing.ts
+++ b/src/lib/pricing.ts
@@ -78,8 +78,12 @@ export function calcTrade(
       return { total, balanceDelta: -total, profit: 0 }
     }
     case 'SELL_SHORT': {
-      const returned = Math.max(0, (2 * avgBuyPrice - price) * shares)
-      const profit = returned - avgBuyPrice * shares
+      // The collateral model: BUY_SHORT debited avgBuyPrice*shares. On close the
+      // formula (2*avgBuyPrice - price)*shares returns the net credit/debit so that
+      // the combined two-leg P&L equals (avgBuyPrice - price)*shares.
+      // No cap: when price > 2*avgBuyPrice the balance goes negative (realistic loss).
+      const returned = (2 * avgBuyPrice - price) * shares
+      const profit = returned - avgBuyPrice * shares // = (avgBuyPrice - price) * shares
       return { total: returned, balanceDelta: returned, profit }
     }
   }