How is the average price calculated for Options positions?
At FYERS, the average price for Options trades is calculated using a combination of FIFO (First In, First Out) and intraday adjustment logic to maintain accurate tracking of cost and realized profit/loss.
How the average price is computed
Intraday Adjustment Comes First
- All intraday buy-sell transactions are squared off first.
- The remaining open quantity (if any) is used to calculate the average using FIFO logic.
FIFO for Overnight Positions
- After intraday trades are adjusted, the FIFO method is applied to match oldest holdings with recent sell orders.
Example
Let’s say you carry 10 lots of Options overnight at ₹50 each.
Here's the breakdown:
- Step 1: 5 intraday lots (₹60 buy vs ₹65 sell)
Profit = (₹65 - ₹60) × 5 = ₹25 - Step 2: 3 remaining sell lots are matched with the overnight lots at ₹50
Profit = (₹65 - ₹50) × 3 = ₹45 - Remaining holding: 7 lots (original 10 - 3 sold) at ₹50 average price
Why it matters
- This method ensures accurate profit/loss reporting, ledger updates, and compliance with tax regulations
- Helps in tracking position-wise cost basis for overnight holdings
FIFO ensures your oldest options are sold first, which is critical for calculating long-term vs short-term capital gains for tax filing.
What if...
| Scenario | Outcome |
|---|
| I only buy and sell on the same day | Average is not calculated—profit/loss is realized based on intraday trades. |
| I sell overnight holdings partially | FIFO method adjusts from oldest positions. |
| I keep buying on multiple days | Average price is recalculated each time based on FIFO and carried quantity. |
Last updated: 25 Jun 2025
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