Few day back i bought idea shares at 3.45 (CNC) along with that I did couple of intraday trades on Idea on the same day using MIS category, so after the end of day in my holding it is showing the average as 3.88, I thought after settlement it will go to 3.45 and I had sold it at 4.05 on the next trading day so 18000 + 3000(intraday) should come to me but instead 9000(both intraday and CNC profit) only come to me.
I don’t understand how come the CNC 30000 shares that i bought at 3.45 becomes 3.88 at settlement and my profit shrank considerably.
This is done recently I had also opened ticket but I am not getting good response.
It hurts if instead of 21000 you got only 9000.
CNC, MIS, etc are internal product codes at Zerodha for categorizing trades into what needs to be squared off before end of the day and what doesn’t. So, if you buy and sell using product type as CNC, it doesn’t mean it is a delivery trade, it will be treated as an intraday trade for calculating P&L.
The actual P&L and buy average doesn’t consider what type of product types was used, but is based on FIFO (First in first out) along the guidelines of the income tax department. So, if you buy and sell multiple times during the day, irrespective of the product type, FIFO is applied and all the buys and sells from the start of the day is matched and the remaining quantity is considered as a delivery trade.
So in your case, assume your trades were for 1 share each trade
Buy CNC - Rs 3.45
Buy MIS - Rs 3.65
Sell MIS - Rs 3.90
Buy MIS - Rs 4.00
Sell MIS - Rs 4.05
You are assuming that the stock you bought as CNC will be what is your holding price. But like what I have explained above, it won’t be that. FIFO will be applied, 1 and 3 (First buy and first sell) will be considered intraday trade. 2 and 5 will be considered intraday trade. So the last trade of Buy 1 share at Rs 4.00 will be considered as as your delivery buy trade. So your holding will show this price as the average buy price.
Btw, this doesn’t affect your profitability. Instead of your profits showing as unrealized profits for your holdings, will be shown as realized intraday profits. You can go check forP&L on Console for that day.
Appreciate your response and the answer pretty much what i am looking for.
just one more doubt Actually that CNC shares were in my holding for 1 day I think though I had to sell it before taking the delivery. Does still FIFO applies if you hold it for 1 day?
FIFO is applied only on intraday trades to determine which should be considered as intraday trades and which as delivery. Whatever is the delivery buy for the day gets averaged with the holdings from before. Can you share the ticket number that you have created?