The average price is calculated as the weighted average of the buy transactions entered by the user into the system.
When the user has entered buy and sell transactions, the reference is to the weighted average of the buy transactions according to the FIFO approach (First In First Out - that is, the security units purchased first will be sold first).
The following example illustrates the calculation in the case of buy and sell transactions:
- January 2024: The user bought 100 shares for $10 per share
- April 2024: The user bought another 100 shares for $15 per share
- June 2024: The user sold 150 shares for $20 per share
In this case, the first 100 shares sold are those purchased in January and the next 50 from the purchase in April. As a result, the holding will consist of 50 shares purchased in April at an average purchase price of $15 per share.
When there are splits or dividends, the purchase price is adjusted by the system, for example:
- During a split, the price and number of units are adjusted based on the split ratio.
- In the case of a dividend, the price is adjusted to reflect a purchase at a discounted price relative to the dividend and share price. According to this calculation, the portfolio's profit is the sum of the dividend paid out throughout the holding period and the share price growth.
In the TASE+ system, the average rate is calculated by TipRanks based on transactions entered by the user.
