How is the profit or loss recognized on execution of square off (cover) orders?
Execution price of cover order is compared against the weighted average price at which the position was built up / previous trading day EOD MTM price (as shown in the “Open Positions – Futures” table) and profit/loss is calculated there from. For example, say you have a futures position – ‘Buy 200 ACC Shares’ in contract Futures – ACC- 31 May 2007 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 ACC Shares @ Rs.
