The average price of your Futures and Options (F&O) position differs from the order price because it combines the weighted average of all transactions for the same contract on a given day.
Calculation Method:
- FIFO Method: The average price is calculated using the First In, First Out (FIFO) method.
- If you trade the same strike price multiple times at different rates, the system computes a weighted average of all executed transactions.
- The average price updates dynamically with every new buy or sell transaction.
Example
- Example 1:
- You buy 2 lots at ₹100 and 3 lots at ₹120.
- Average Price = (2×100 + 3×120) / (2+3) = ₹112
- Example 2:
- You buy 50 NIFTY 18000 contracts at ₹100 and another 50 at ₹50.
- Average Price = (50×100 + 50×50) / 100 = ₹75.
Note: The system recalculates the average price each time you perform a new transaction for the same strike price.