Upstox uses the Starting time In, First Out (FIFO) method for computing the average price for overnight (Delivery) positions. Let'due south understand this calculation past taking an example of Smashing Futures.

On 1st July:

Orders placed: ii

1st society: Quantity = 225 | Price = Rs. x,000.00

2nd order: Quantity = 75 | Toll = Rs. 10,200.00

To calculate the average price, get-go calculate the value (Quantity x Price). Hence:

1st trade: Rs. 22,l,000.00

2nd merchandise: Rs. seven,65,000.00

Total quantity = 300

Full value: Rs. thirty,xv,000.00

Divide total value by total quantity:

Rs. 30,15,000.00 ÷ 300 = Rs.x,050.00

This is the average toll.

On 5th July:

Allow us see what happens when you add a sell lodge to this:

Sell order placed on 5th July: 150 (out of 300)

Cost: Rs. 9,950.00

Now the FIFO method will be practical hither. The method will check the first merchandise (on the buy-side). In this case, it is 225. 150 will exist deducted from 225. The rest left is shown below.

Later on applying the FIFO method,

Remainder: 225 - 150 = 75

(Note: In example the sell quantity was more than 225, then it would accept moved to the next merchandise to deduct the remaining quantity.)

Boilerplate price = Full Price ÷ Full Quantity

Average price: Rs. 15,15,000.00 ÷ 150 = Rs. ten,100.00

This is how the FIFO method is used for calculating the average price. Adding remains the same even if you are conveying information technology on the curt sold position instead of the buy position.

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