Since I am experimenting anyway, I went back to some older trades, but those are not “short” trades, they are regular long trades. They are also trades of short duration, and very similar except that the purchase happened before the sale. And sure enough Excel has no problem at all calculating IRR, even when there are only 2 cash flows, and even when IRR is large. Here’s an example -
The other thing that needs to be understood is that a negative cash flow is literally that, a cash flow OUT of the account, and a positive cash flow is a cash flow INTO the account.