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Why is there profit in the positions tab on Kite despite a higher buy average than the LTP?

When the buy average is higher than the Last Traded Price (LTP), a profit can still be seen in the positions tab on Kite. This occurs when multiple trades have been executed in the same scrip within the trading day, and a new position is opened for that instrument.

Example Scenario

  1. Assume the client initially buys 50 shares of a stock at ₹280 and later sells them at ₹287, resulting in a profit of ₹350.
  2. Then, the client buys 70 shares of the same stock at ₹283.
  3. The buy average displayed in the positions tab is calculated by considering the total quantity traded:
    Buy average = ((50 * ₹280) + (70 * ₹283)) / (50 + 70) = ₹281.60 (rounded to two decimal places).
  4. If the stock price later drops to ₹280, the displayed profit or loss (P&L) will show a profit of ₹140, even though the buy average of ₹281.60 is higher than the price.

This calculation method considers all the trades made in that particular scrip for the trading day, providing an overview of the P&L for those trades in the positions tab on Kite.