How is buy average calculated for F&O trades?

The average price of the positions may change if the same contract is traded multiple times. Regardless of the product type used to close the positions, the buy average for F&O positions is calculated using the FIFO (First In, First Out) method (MIS or NRML).

Because all trades must use the FIFO method, it's best to use the same method when filing income tax returns. Before deviating from the FIFO method used on Tiqs and Console, please consult a CA.

Date	Symbol	Trade	Type	Quantity	Rate
6th Aug	Nifty	Buy	FUT	50	16000
7th Aug	Nifty	Buy	FUT	50	16100
7th Aug	Nifty	Sell	FUT	50	16050

To understand FIFO, consider the following trades: In the example above, the buy trade executed on August 7th will be the open quantity at the end of the day, so the average price of the open quantity on August 7th will be 16100. This logic holds true regardless of the product type used for the trades on August 7th.

The profit and loss statement will show a booked profit of 2500 [i.e. (16050-16000)*50], and the position will show the difference between the current market price and 16100 as the open position's gain/loss. Both carried forward (NRML) and intra-day (MIS) trades follow the same FIFO logic. However, MIS positions can only be exit by using the MIS product type, and NRML positions can only be exit by using the NRML product type. An NRML position cannot be exited with a MIS product type, and vice versa.