If I use a schedule function to place an order using order_target_percent on market start but haven't exited it yet(say gone long with half of the portfolio on one share and short with the other half on another share), when the next time schedule function is called on the next morning, where does it get new funds from, or do the old positions automatically exit at the end of the day to get the funds back
The backtest engine assumes you have better credit than Warren Buffet and will allow you to place as many orders as you wish. The funds to place any new long orders simply reduce the portfolio cash. The cash can (and often does) go negative which means one has 'borrowed' funds (ie dipped into margin or increased leverage). There is nothing preventing cash from going negative. The backtest engine will never 'automatically' exit positions**. It's up to the algo logic to keep leverage under control.
Using the order_optimal_portfolio method can make ordering a bit easier. That order method will close out any positions which are not explicitly opened or held. It also handles the checking for data.can_trade. I'd encourage using that with a TargetWeights objective rather than order_target_percent. Both work but a little more convenient to use order_optimal_portfolio.
** The one situation where the backest engine will automatically exit a position is when a security is delisted. If one is holding a security and that security becomes delisted, the backtester will close the position and credit the account with the last known value of the security. This is similar to what a broker would do in real life.
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The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory services by Quantopian.
In addition, the material offers no opinion with respect to the suitability of any security or specific investment. No information contained herein should be regarded as a suggestion to engage in or refrain from any investment-related course of action as none of Quantopian nor any of its affiliates is undertaking to provide investment advice, act as an adviser to any plan or entity subject to the Employee Retirement Income Security Act of 1974, as amended, individual retirement account or individual retirement annuity, or give advice in a fiduciary capacity with respect to the materials presented herein. If you are an individual retirement or other investor, contact your financial advisor or other fiduciary unrelated to Quantopian about whether any given investment idea, strategy, product or service described herein may be appropriate for your circumstances. All investments involve risk, including loss of principal. Quantopian makes no guarantees as to the accuracy or completeness of the views expressed in the website. The views are subject to change, and may have become unreliable for various reasons, including changes in market conditions or economic circumstances.