I bought Nifty 22000 CE (1 lot) for monthly expiry at Rs 200. Then I added few more lots at lower prices and the avg price becomes 149. Now, if I sell only 1 lot at Rs 160, it will be sold according to the avg price or not? Will I get profit of 160-149= 11 points or loss of 200-160=40 points?
Zerodha console is showing a loss of 40 points. Can somebody clear this query?
Hi @Shweta11
The buy average for F&O positions is calculated using the FIFO
That’s correct. This is done as all trades must use the FIFO method as mandated by the Income Tax Act.
While you will see 40 rs loss in one lot for now, in your further trades, the buy average drops down further, and your profits will be higher while booking the other lots. The net impact will be same. Only the method of computation of profits is as per FIFO
Okay, got it. Yes, the average price also reduced. Thank you for helping out. God bless.
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