General Queries

How is the average price of stocks determined in Portfolio as per FIFO method?

The price of stocks is determined based on the FIFO (First In First Out) method in Portfolio. The FIFO method is applicable in Cash (Delivery) segment and MTF. In case of Intraday, since the shares are bought and sold on the same day, the position is squared immediately.

The FIFO method assumes that the stocks that were purchased first are sold first. Consequently, the stocks that are purchased later are sold later.

Example:

Mr. A purchased shares of TATAMOTORS on the following dates:

Average Price = 4750/300 = 15.83333

Now, suppose Mr. A performs a sell transaction as follows:

The calculation of the average price of the remaining shares in Portfolio as per FIFO is shown in the table below:

Now, the average price = 3300/170 = 19.41176