To better understand Intraday trading, let's walk through an example:
On 1st July:
Orders Placed: 3
1st Order: Price = ₹200 | Quantity = 50 | Buy Order Value = ₹10,000
2nd Order: Price = ₹204 | Quantity = 50 | Buy Order Value = ₹10,200
3rd Order: Price = ₹208 | Quantity = 25 | Sell Order Value = ₹5,200
Calculations:
For the first and second orders:
Total Quantity = 100
Total Value: ₹20,200
Average Price = Total Value ÷ Total Quantity
₹20,200 ÷ 100 = ₹202
Sell Order Placed: 25 (out of 100)
Price: ₹208
Sell Order Value: ₹5,200
Applying FIFO Method:
Deduct 25 from the first trade (buy side), leaving a balance of 25.
After Applying FIFO:
Balance: 25 (50 - 25)
New Calculation:
1st Order: Price = ₹200 | Quantity = 25 | Buy Order Value = ₹5,000
2nd Order: Price = ₹204 | Quantity = 50 | Buy Order Value = ₹10,200
Total Order Value = ₹5,000 + ₹10,200 = ₹15,200
Total Quantity = 50 + 25 = 75
Average Price = Total Order Value ÷ Total Quantity
₹15,200 ÷ 75 = ₹202.67
The average price calculation remains consistent whether you are carrying a sell position or a buy position.
This breakdown aims to simplify the understanding of Intraday trading calculations.