How is the buy average calculated in Console?

The calculation of the buy average price follows the First In, First Out (FIFO) method, where the shares that were bought first are deemed to be sold first from the account. FIFO is mandated to be used to report profit and loss (P&L) while filing income tax returns as per the income tax department (WEB). The buy average calculation of holdings does not include intraday trades. If the holdings are sold and bought back on the same day, any difference will be regarded as an intraday profit or loss, and the buy average of the holdings will remain unaffected.

Example Scenario

In the above table, 20 quantity is sold in the third row. As per FIFO method, this is deducted from 50 quantity in the first row. So 30 quantities will be remaining, which is considered while calculating the buy average.

The buy average of ITC  in the holdings is ₹261 [(30*260) + (30*256) + (20*270) / (50+30-20+20)]

To learn more, see How is the buy average affected when shares from holdings are sold and bought back on the same day?