Share prices calculation

Hey everyone! Hope you’re well in this trying times!

A quick basic question. How’s the difference in price for the same stocks calculated in the real-time P&L statement? i.e. I buy 10 stock of X company for $100, later there’s a price drop and buy 10 more for $50 - the app shows that I have 20 stocks of a value of $1500 but how is profit and losses calculated if it goes the price of the stocks goes to $75? it’s a loss of $25 on the first set and a gain on the second? Same thing if I sell them, those 10 stocks are valued with the $25 loss or gain? I’m a bit confused but this (obviously)

Thank you!

If you put those two purchases together you bought 20 shares at an average price of $75. 20*75=$1500. At the $50 share price your shares lost a value of $500. But once it goes to $75 you have broke. Even again, and your are back to the $1500 you invested. You treat all the shares together, and not in different sets. If you sold 10 of the stocks at that price you wouldn’t have gained or lost any money, you would have taken $750 out and left $750 in. Hope this helps. I’ve read in a previous thread that some European countries treat the shares in sets as you said for tax, so I’m not sure how that works, but on trading 212 and here in the UK it’s all treated as an average

Gotcha! Makes totally sense, so I guess the P&L indicator in the app adjusts itself based on the average price of the stocks combined whenever you buy new ones right? Thanks a lot man, really cleared things up

1 Like