Hi Evan,
Just to check if StockCafe has this feature where when I partial liquidate some of my counter, the system will recalculate the average buy price based on First-In-First-Out (FIFO) rule?
Let’s take my transaction history below as example:
Counter | Action | Date | Qty | Price | Contract Value after comm | |
---|---|---|---|---|---|---|
PaySign, Inc | SELL | 29-Oct-20 | USD | 416 | 4.85 | 2,006.80 |
PaySign, Inc | BUY | 10-Sep-20 | USD | 179 | 5.62 | 1,016.66 |
PaySign, Inc | BUY | 3-Sep-20 | USD | 159 | 6.29 | 1,010.81 |
PaySign, Inc | BUY | 17-Aug-20 | USD | 136 | 7.4 | 1,017.09 |
PaySign, Inc | BUY | 22-Jul-20 | USD | 108 | 9.5 | 1,036.70 |
PaySign, Inc | BUY | 24-Jun-20 | USD | 361 | 8.05 | 2,916.75 |
Total Buy Qty = 943, Total Buy contract value after comm = 6,998.01
If we use the cost basis (non-FIFO), my average buy price after partial liquidation will be
the same as before the liquidation, ie 6,998.01 / 943 = USD7.421
However, if we use FIFO rule, where my earliest buy trade will be squared off first, followed by the 2nd earliest, the table will become like this:
Counter | Action | Date | Qty | Price | Contract Value after comm | |
---|---|---|---|---|---|---|
PaySign, Inc | SELL | 29-Oct-20 | USD | 416 | 4.85 | 2,006.80 |
PaySign, Inc | BUY | 10-Sep-20 | USD | 179 | 5.62 | 1,016.66 |
PaySign, Inc | BUY | 3-Sep-20 | USD | 159 | 6.29 | 1,010.81 |
PaySign, Inc | BUY | 17-Aug-20 | USD | 136 | 7.4 | 1,017.09 |
PaySign, Inc | BUY | 22-Jul-20 | USD | 53 | 9.5 | 543.90 |
Total Buy Qty remained = 527, Total Buy contract value after comm remained = 3,588.46
In this case, with FIFO my average buy price after partial liquidation will now become
3,588.46 / 527 = USD6.81
Such differences (USD7.421 vs USD6.81) will affect how the PnL figures of existing positions to be reported & many brokerage platforms follow the FIFO rule.
My apologies for such lengthy feedback.
Look forward to your reply soon.
Cheers,
SetsunaSoon