Your buy average for F&O positions uses the FIFO (First In, First Out) method when you trade the same contract multiple times. This calculation applies regardless of the product type (MIS or NRML) you use to close positions.
FIFO method for tax compliance
Since all trades must use the FIFO method, you should use the same method when calculating P&L for income tax returns. Consult a CA before deviating from the FIFO method used on Kite and Console.
FIFO calculation example
Consider these trades:
| Date | Symbol | Trade Type | Quantity | Rate (₹) |
| 06th Aug |
NIFTY18AUGFUT
|
Buy | 75 | 11000 |
| 07th Aug |
NIFTY18AUGFUT
|
Buy | 75 | 11100 |
|
07th Aug
|
NIFTY18AUGFUT
|
Sell | 75 | 11050 |
How the calculation works
- FIFO allocation: The system matches your sell order with your first buy order (06th August at ₹11000) using FIFO method.
- Remaining position: Your remaining open quantity comes from the 07th August buy trade at ₹11100, making ₹11100 your average price for the open position.
-
P&L calculation:
- Booked profit: ₹3750 [(11050-11000) × 75]
- Open position P&L: Difference between current market price and ₹11100
The FIFO logic applies to both carried forward (NRML) and intraday (MIS) trades. However:
- You can only exit MIS positions using MIS product type
- You can only exit NRML positions using NRML product type
- You cannot exit an NRML position using MIS product type and vice versa
This calculation method remains consistent regardless of which product types you use for your trades on any given day.