Average price of shares after sell

Dear Executive,
As upto yesterday I have 1100 Shares of Unitech limited at average cost at Rs:1.98,& yesterday I sold 700 shares at a price of Rs 1.98.
Now I have seen 400 shares in my account with an average cost of Rs 1.50.

Coming to my doubt

How the average cost of share price reduced from Rs 1.98 to Rs 1.50 and what is the logic behind it.because of the reducing price i am losing my capital also

Please see below calculation

Actual Share details up to yesterday
S.no Qty of share Average Cost Total Price Remark
1 1100 1.98 2178 Actual buying cost
Yesterday Transaction details
S.no Qty of share Average Cost Total Price Remark
1 700 1.98 1386 Sold yesterday
Remaing shares shown in my account to day
S.no Qty of share Average Cost Total Price Reamrk
1 400 1.5 600

A)Before Selling shares my principal amount : Rs 2178
B)After sold my shares yesterday i got only Rs :1386
C) Remaining 400 share avg cost @Rs 1.50 = Rs :600

Total (B+C) =1986

loss in principal amount by reducing average cost in remaining shares =Rs 2178-1986 = 192

Why is the average cost reduced by selling the shares?

Did you buy 1100 shares on different occasions and at different prices?

If you accumulated 1100 shares partially at different prices (firstly at higher prices and then at lower prices) then your average price comes down as shares which you bought earlier (at higher prices) are sold first (this is called First In First Out method).

yes , i have taken at different occasions and prices are also different

yes , i have taken at different occasions and prices are also different

That is why average price is going down and Rs. 192 which you are calling as a mismatch in your investment value is the loss you have made on this trade.

if you dont mine ,could you explain with calculation pls?
How I have made loss by doing average pls expain,

Theses is really very dangers if we make loss my doing average,

Ref. Screenshot below, I’ve tried to do probable breakdown of your trade.

On Day 1 you bought 400 at 2.5, On Day 2, 400 at 1.75 and on Day 3, 300 at 1.25.

Now total quantity = 1100, Total Value = 2075 and Avg. Price = 1.88.

You sold 700 quantities at 1.98.
Following the FIFO method, Shares bought on Day 1 will be sold first and on that you are making loss of 208 (Buy 400 at 2.5, Sold at 1.98) and 300 will be sold from shares bought on Day 2, where you will make profit of 69 (Buy 300 at 1.75, Sold at 1.98) so in total you make loss of 139 by selling 700 shares.

Since the shares sold from your Demat account where those bought on Day 1 and 2 and at higher prices, Average price of your 400 shares comes down to 1.37.

PS: All values are used only for explanation purposes and don’t resemble actual values of your trades.


Really thank you very much your support for understanding the calculation
thank once again

Shouldn’t zerodha show at the time of sell order creation the average price of first 700 shares so that we know we are making a loss effectively rather than a profit?