Hey all,

Maybe someone in here can tell me. Let's say for exaple you buy 5000 shares of XYZ company stock for $3.00/ share($15,000 total). Then you see the price of the stock drops to lets say $ 1.50/share, so you decide to buy 10,000 shares at the new price of $ 1.50 to cost average you price per share down to a rough estimate of about $1.35-1.40/share. Then let's say you want to sell 5,000 shares of XYZ. When you goto sell the 5,000 shares, are the ones sold the shares you bought at $3.00/share, or the ones you just purchased at $ 1.50/share? Are the sale of shares treated and handled as FIFO(First-in-First-Out), or like LIFO(LasT-in-Last-Out)??

My question is how would I know how many shares as well as what price my remaining shares are at what averaged price? I welcome any comments and answers as well as examples on this question. 

 Hi to keep from getting confused in this game, I deal with only one stock at a time. If I were in your shoes I would have sold my first stock and then purchased at the lower cost not to confuse myself. But that is only my opinion and I am also new at this so good luck. I think it pretty cool that you at least knew to buy the lower stock price I never thiought of it like that.

JayDub1984:

When you goto sell the 5,000 shares, are the ones sold the shares you bought at $3.00/share, or the ones you just purchased at $ 1.50/share? Are the sale of shares treated and handled as FIFO(First-in-First-Out), or like LIFO(LasT-in-Last-Out)??

There is no difference. All 10,000 shares are worth whatever the current price is.

JayDub1984:

My question is how would I know how many shares as well as what price my remaining shares are at what averaged price? I welcome any comments and answers as well as examples on this question. 

Your buy-in price can be thought of as (all purchases / total number of shares). In this case you paid a total of 22,500 for 10,000 shares, so you have averaged it down to $2.25/share. Whatever number you sell above that point can be seen as "at-profit." I believe WSS's "price-paid" column reflects this averaging.

 So what your saying i, is even if you buy the newer shares at significantly less than the shares you already have all I do id just divide my total price paid by the total number of shares I have?

JayDub1984:

Hey all,

Maybe someone in here can tell me. Let's say for exaple you buy 5000 shares of XYZ company stock for $3.00/ share($15,000 total). Then you see the price of the stock drops to lets say $ 1.50/share, so you decide to buy 10,000 shares at the new price of $ 1.50 to cost average you price per share down to a rough estimate of about $1.35-1.40/share. Then let's say you want to sell 5,000 shares of XYZ. When you goto sell the 5,000 shares, are the ones sold the shares you bought at $3.00/share, or the ones you just purchased at $ 1.50/share? Are the sale of shares treated and handled as FIFO(First-in-First-Out), or like LIFO(LasT-in-Last-Out)??

 

My question is how would I know how many shares as well as what price my remaining shares are at what averaged price? I welcome any comments and answers as well as examples on this question. 

i do not know how wss handles this, i would let them know what you want to do and which lot you want to sell at the current price. this is done the same way in real life. you would have to call your broker and explin that you want you later lot size sold at the current price as oppose to your original (first time buy) lot size or else your broker would just sell your initial core position first and then whatever positions you had accumulated in chronological order. (i.e.: buy 100 shares of xyz at 0.10c and bought an additional 200 shares of xyz at .25c and bought another 300 shares of xyz at .30c. xyz soars to 1.00 and you decide to sell 100 shares those 100 shares sold will be your initial 100 shares bought at .10c unless otherwise stated by the individual and will continue to do so... so you want to sell again when xyz goes up to 1.10 and you decide to sell 200 shares it will be taken from your 200 shares bought at .25c. however you can say that you want to sell your third position of 300 shares bought at .30c instead of your initial 100 shares at .10c) but YOU HAVE TO explain to them that you want to do this. i heard some brokers charge a certain fee for this as well, but i have not experienced it with scottrade 

so.. yes, first-in, first-out