Do You Know that you can set your cost method of how the platform display your stock P&L? (Avg Cost/FIFO/Diluted Cost)

Michane
04-11 00:56

Keep wondering why my realized profit/loss is not calculated by my average cost of stock holdings (both yellow underlined prices) :

This realized P&L displayed was calculated by FIFO method (ie. when my 500 sell CALL shares at 4.50 strike was being called away, the 500 shares called away (sold) were those I bought earliest at price 5.50! )

I had to seek out from the ever helpful customer service.

That's the icon to look out for if you wish to change method (Avg cost/FIFO/Diluted cost) under your Portfolio

Scroll down the page to find this section

If I had chosen diluted cost, this is how it's calculated:-

First I bought, 5.50 x 500 shares = $2750

Next bought, 5.19 x 500 shares = $2595

So, total amount bought during holding period, 2750+2595=$5345

Total amount sold (called away), 4.50 x 500 shares = $2250

Hence diluted cost, (5345-2250)÷500 =$6.19

So rather than display diluted cost of 6.19, definitely the average cost would be better.

At least it's the simplest way to calculate for most of us I believe.

Because if you were to look at this below, I believe some of you might be staring at it and could not understand what they meant[Surprised] 

Anyway after reading, hope this will be helpful to some of you.

Trade safe and ciao till then!

Modified in.04-11 01:04
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Comments

  • ZhongRenChun
    04-11 04:34
    ZhongRenChun
    I would prefer lot method. where i buy first lot of 10 shares. then I buy second lot of 20 shares.  then I sell first lot of 10 shares, it should calculate based on first lot of 10 shares.  not take average of all shares.
    • MichaneReplyZhongRenChun: 
      ah I see.. doesn't seem like we can control that specifically though
    • ZhongRenChunReplyMichane: 
      no because the lot is based on buy order. not based on time. the first lot i sell will not be the first lot I bought.  say I buy 3 lots, one in 2024, one in 2025, one in 2026. I may sell 2026 lot first.
    • Michane: 
      isn't that FIFO (first in first out)?
  • DiAngel
    04-11 22:58
    DiAngel
    Thanks. Still complex to me. [Lovely]
    • Michane: 
      no worries! Anyway after all stocks are closed, P&L isn't affected by the method we choose as that's only for display.
      The conclusion is just set the simplest method for our own understanding - Avg cost method [Sly]
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