I purchased 2 Amazon shares 1 each at different times
1 share - May 2019 at Ā£1500
1 share - Apr 2020 at Ā£1940
Today the share was trading at Ā£1900 and my investment gain/loss in +6% which is correct.
I would imagine that when I sell one share of Amazon at Ā£1900 my investment gain should still read as +6% ? But what I see is around -2% which is computed based on the share I purchased on Apr 2020 and not based on the average purchase price.
So I would like to understand if that is the intended calculation?
Normally the profit is calculated based on the average of those two purchases, which should be Ā£1720.
It may or may not explain the difference; but did you look at the GBP/USD exchange rate difference? It could have played a part, plus 0.45% FX fee in both transactions
I canāt find the other thread about the P&L calculation but ultimately itās a first in first out calculation rather than a cost average one which would remain constant when you sell.
A cost average is the only way your purchase price should be calculated. Not including the price of the oldest shares when you sell, just doesnāt make sense.
FT should change this
Youāll have the bid / offer spread at least as a difference too. Not sure what the spread is on tesla but itās not unreasonable to see it around 0.3%
I get the bid offer spread means Iām not guaranteed the price at point of sale but somewhere in between. But I actually got the share at $799 a few days agoā¦ very odd and canāt quite figure it out.
Donāt forget about FX. GBP:USD in this case. Could be that FT is calculating your Ā£ then vs Ā£ now (rather than in $ terms). Iām not sure about this but it could explain it.
Can anyone offer some guidance on how the FreeTrade investment gain/loss is calculated against a investment for one company? For example, I have invested in BP on the following dates, with two sells on the 18th May and with speculative sell using todayās price of Ā£3.16 if I were to sell my entire holding.
Iām pretty sure the gain/loss takes into account any dividends that youāve received from the company, thatās possibly why itās higher than what you calculate.
Hmm, Iām stumped then. I know there was an issue today with some of the pricing and the graphs, but I wouldnāt have thought that would have changed the calculation - maybe see if it changes tomorrow at market open, or drop Support a message?
Correct me if Iām wrong but the profit/loss shown in FreeTrade in this example is wrong then? Because as you can see the profit if I sell is not Ā£4.46 but -Ā£1.79?
Itās ācorrectā though given how FT work out the AVG price which given a first in first out calculation makes the avg 5p less than your AVG price.
I think most users would prefer not to use a first in first out AVG calculation
I suspect many newbie investors are using this profit/loss calculation when selling out a position which in my instance would result in a -Ā£1.79 loss instead of Ā£4.46 gain.
Can someone from FreeTrade confirm this is how it works as it is very misleading.
I am using morningstar for portfolio tracking and it shows numbers completley different from the FT despite my best attempt to put all the fees in religiously. I am learning to live with it, although not sure what is causing the difference, possibly conversion rates (which wouldnāt apply to your BP stock).
But if I work out my gains manually Iām only seeing an overall profit of Ā£5.28
Please can someone from FreeTrade look at this issue and advise if it is something Iām doing wrong because there is a clear discrepancy between what FreeTrade shows as profit and what I am calculating.
