In order to use negative stocks, you have to allow negative stock in customizing. 

Only those materials for which negative stocks is activated in the material master, will be allowed to have negative stocks.

Customizing: transaction OMJ1 - Allowing Negative Stocks. 

First level: Valuation area. 

Choose for which valuation area you want to allow negative stocks and activate the flag. 
Select the line of that valuation area and go to the plant level. 

Second level: Plant. 

When only one plant exists for that valuation area (this will always be the case in case the valuation area is defined as a plant), you see immediately a details screen with special stocks. 
Choose the special stocks that may go negative. Next use F3 or the green arrow to return to the overview of the plants. Select the plant and go the the storage location level. 

Third level: Storage Locations. 

Select for which storage locations negative stock is allowed. 

Save the whole lot. 

Negative stock will now be allowed in the selected storage locations for all materials that have the negative stock indicator activated in the material master in the storage 2 view. 

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