1) How Portfolio is computed?
Portfolio is computed based on the following factors -
A. Delivery Trades that you have done through 5paisa trading account.
B. Corporate actions that are applied on the stocks you have Purchased.
C. Off-Market share transfers (Inward/Outward) in your Demat account with 5paisa
2) How is Average Buy Price calculated?
A. Average Buy price is the weighted average of all the Delivery Purchases carried out in a particular stock. It only applies to Quantity which is open in your Portfolio.
B. Share Transfers from Other Demat Account to 5paisa Demat account will be considered. Closing price on the day of Transfer will be taken as Buy Price.
C. All Intraday Transactions done are excluded in Calculating Average buy price.
D. In case of Multiple BUY and SELL Delivery transactions in 1 stock, the SELL Quantity is first adjusted against the Oldest BUY Transaction. This method is also called FIFO (First In First Out).
E. Brokerage and Taxes also taken into consideration for calculating Buy Price.
3) Why do you calculate Buy price using FIFO Logic?
Profit & Loss in Shares are Taxable. So to calculate right profit & Loss which can be bifurcated between Short Term Capital gain and Long Term Capital gain we need to apply FIFO (First in First Out) Logic
4) What are Corporate Actions?
Companies periodically announce corporate actions like Bonus, Split, Mergers which will have an impact to the holdings. In the portfolio computation logic, system applies the corporate action effect as announced by the company. Read more about Corporate Actions here (Corporate Actions)
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