How to calculate the Average cost in intraday trading?
The Average cost is useful when you trade the same stock multiple times. It helps you determine the overall average price of your buy and sell positions, allowing you to assess your profit or loss more accurately.
Example:
- You buy a share of ‘M Ltd’ at ₹100 and sell it at ₹105. You make a profit of ₹5.
- Later, you buy the same scrip at ₹110 and sell it at ₹120. You make a profit of ₹10.
Calculation:
- Average Buy Price = (100 + 110) / 2 = ₹210 / 2 = ₹105
- Average Sell Price = (105 + 120) / 2 = ₹225 / 2 = ₹112.50
Overall Profit:
- Profit = (112.50 - 105) × 2 shares = ₹15
- This ₹15 will be shown under the Realised P/L in the dashboard as a total, making it easier to track.
Average cost helps you track the overall performance of intraday positions when you buy and sell the same stock multiple times. Use it to calculate your cumulative profit or loss.
What if...
| Scenario | Outcome |
|---|
| You trade the same stock multiple times | The average buy and sell prices will be calculated for your entire trade history |
| You don’t calculate the average cost | It can be difficult to determine your overall profit or loss from individual trades |
Last updated: 27 Jun 2025
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