At Upstox, the average price for overnight (Delivery) positions and holdings is calculated using the First In, First Out (FIFO) method. Let's break down the calculation with an example.

On 1st July:

Orders Placed: 2

1st Order: Quantity = 225 | Price = Rs. 10,000.00

2nd Order: Quantity = 75 | Price = Rs. 10,200.00

To calculate the average price:

Calculate the value (Quantity x Price) for each trade.

1st Trade: Rs. 22,50,000.00

2nd Trade: Rs. 7,65,000.00

Total Quantity = 300

Total Value = Rs. 30,15,000.00

Total Value ÷ Total Quantity = Average Price

Rs. 30,15,000.00 ÷ 300 = Rs. 10,050.00

On 5th July:

Sell Order Placed: 150 (out of 300)

Price: Rs. 9,950.00

Applying FIFO method:

Deduct 150 from the first trade (buy side), leaving a balance of 75.

After applying FIFO:

Balance: 75 (225 - 150)

Average Price Calculation:

Total Value ÷ Total Quantity = Average Price

Rs. 15,15,000.00 ÷ 150 = Rs. 10,100.00

This FIFO method remains consistent whether you are calculating it for a buy position or a short-sold position.

This breakdown aims to simplify the understanding of the FIFO method in calculating average prices.