Partial covering mechanics¿?

Discussion in 'Order Execution' started by ronin266, Apr 19, 2012.

  1. Hi,

    I would like to know what is the rule to calculate profits in partial covering of positions?.

    Lets say:

    I bought 100 shares @ 10.00
    I add another 100 @ 10.10 (average price would be 10.05 200 shares)

    Price goes in my direction

    I decide to cover half (100) @ 10.20
    and the other half @ 10.30

    What part of my position would close at each price?

    I mean, the first lot at 10.2 and second at 10.3 (20 + 20 profit) , or the first the added 100, and only then my first lot (10 + 30 profit)? or it would be calculated from the avg price?

  2. Omg, no one knows??? ffs
  3. If this is for tax purposes, use whatever method your broker has on record for you, probably FIFO. If it's just for your own use... I use LIFO because I usually scale into and out of positions, but some people use average price.
  4. Nope, it´s for risk management purposes while managing big positions.

    Because it will change a lot if lets say. I bought 10000 @ 10.00 for a quick scalp, and wanna take out the offer @ 10.10 for 5000. Then I think to get rid of the stocks that I got while taking the offer at 10.15. It gonna affect the stop price for the entire position getting out that 5000 for .15 or for .05 cents profit, while keeping the rest of the position??? :/.