How should the holdings average price be calculated in this case?

100 Shares Bought @ Rs 100 on 1st April
100 Shares Bought @ Rs 200 on 5th April
100 Shares Sold @ Rs 150 on 10th April

What should be the average price displayed for the remaining 100 shares bought on the trading platform?

  • Rs 150, because the average purchase price of 200 shares is Rs 150
  • Rs 200, Considering FIFO (first in first out) first 100 shares bought was sold, second 100 shares left at Rs 200.

0 voters

6 Likes

As per FIFO, Average price will be 200rs for 100 Qty.

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FIFO logic. Same is used for tax purpose also. So, it will be in sync.

3 Likes

It must be 150, because the selling date is after both the purchases.

FIFO method helps to know know the current state of profit/loss on open position. For positions already closed, the profit(loss) has materialized and should show up as actual gain/losses in P&L. Helps in decision making on whether to continue holding the position or exit or take further positions. Please change the method of calculating profits to FIFO. Or if possible, allow the user to choose either method to show the P&L.

1 Like

Avrage method is the best for reporting.

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it should be simple average including all costs i.e STT exchange charges,etc

2 Likes

I would prefer average cost based on actual money spent for purchase and redemption and hence Rs 150

2 Likes

Why arenā€™t we having an option to segregate our buying prices into separate lots like in Money Control? That way itā€™ll be easier for us to sell whichever lot we want first, right?

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FIFO if the price has decreased for the first purchase
FILO if the price as increased for the last purchaseā€¦

an option to choose for somewhere in Q separately for every individuals is the best idea

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Guys, Letā€™s think in about the following example.If you technically believe FIFO method,then you could end up into the losses. ( price drop scenario)
Order Number No of Shares price Total Cost
1 1000 100 100000
2 1000 80 80000
3 1000 70 70000
4 1000 75 75000
5 1000 72 72000

The Average cost per share is 79.4.

So,The current trading price is 60. some fine day he sees that the share is trading above average price > 79.4 ( assume price traded is 80) . So he think that he get rid off from the few shares and sold 2500 shares from his inventory.
After sell of the shares He left with 2500 shares and assuming that average price is not changed.

But with Re Calculation logic on selling shares will lead the customer into losses when he forgot the actual buying average price.

After your re calculation the average price reduced to 60.66 . After some time the share price is trading at @74 and he sees that he is in profit with your re-calculated average.( Actually he forgot the origin average price and assumes he in profit and sold all the shares)

Here is his profit/loss

250080 =200000
2500
74 =185000

Total he got to sold the shares =385000
Total his investment= 397000

Total profit/loss= 397000-385000=12000 Loss

Thanks,
Shiva Oleti

If it is FIFO,

100 Shares Bought @ Rs 100 on 1st April
100 Shares Bought @ Rs 50 on 5th April
100 Shares Sold @ Rs 80 on 10th April,
In this case what should you expect to show the average price to be displayed? is it 75 or 50?
The present scenario it is showing 50. With this you sell the profit seen in the Kite, (@ 52) you could end up into losses.

Both averages are useful info, so if possible both can be displayed (FIFO in parentheses)

e.g.

Avg Price

150(200 fifo)

1 Like

There should be an user option in settings menu something like this

  • Average buy price calculation formula
    :ballot_box_with_check: Display average using FIFO
    ā˜ Display average of all trades of same equity since first trade of this average started

Personally I would like to have an expanded view when clicked on a scrip. It should show avg pricing and should not adjust the profit made by FIFO. What is means that

  1. Bought 10 shares at 100 sold at 110
  2. Bought 10 shares at 105 should be shown as 105 only. In holdings profits should not be adjusted. If another buy happens at 99 again then avg should be shown and given a chance to liquidated either shares bought at 105 or 99. Again no profit should be used in showing averages.
1 Like

This shoudl be weighed average. (100100 + 100200 + 100*150) (45000 Divided by 300 and that is 150)

i buy in parts so total number of shares are always divided by total amount spent to buy those shares ā€¦calculation wise its easy to know exactly how much profit is been made by selling all those shares even in partsā€¦

Avg. holdings price = Cumulative Amount / Cumulative Qty

The price should be Rs.150 for 100 quantities.