How is the profit and loss recognized on execution of square up (cover) orders?
Execution price of cover order is compared against the weighted average price at which the position was built up as shown in the “Open Positions for FuturePLUS” and profit/loss is calculated therefrom. For example, say you have a FuturePLUS position – ‘Buy 200 Reliance Shares’ in contract Futures – ACC- 26 Jun 2008 at an average price of Rs. 300 per share created through the execution of two orders – ‘Buy 100 @ Rs. 310 per share’ and ‘Buy 100 @ Rs. 290 per share’. If you square off a part of the position by selling 50 Reliance Shares @ Rs. 305 per share, the profit on such square off would be calculated as: Quantity squared off * (Square off trade price – Weighted Average price of the position) 50 * (305 – 300) = 250 Profit or Loss for all your trading transactions can be checked from the “Portfolio Details” link on the FNO trading page for FuturePLUS product.
