What is considered a profit?

Discussion in 'Ask any question!' started by Stock_King_Stuffer, Dec 17, 2021.

  1. Stock_King_Stuffer

    Stock_King_Stuffer New Member

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    Say for easy math I bought 1000 shares of a company for 1.00, but then averaged down to .75 by buying another 1000 shares for .50. Now say the price has risen to .65 and I am in need of cash. If I sell 1000 shares at .65, is that considered a loss since it's below my average or a profit since it's more than I paid for my last trade?

    Thanks for the input!
     
  2. urbnsr

    urbnsr New Member

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    I realize I am late to the party, but if considering taxes, it would depend on any possible settings when selling.

    I have my default set to FIFO - first in, first out. So, in the OP example, you would sell at a loss because of selling the first 1000 shares (as I understand it).
     
  3. ddebrazza

    ddebrazza Active Member

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    That is definitely a loss. Basic math, if you are selling below your avg. cost per share, then you're losing money. The real question is, whether when you sell at 0.65$ are you making more or less money than if you were to wait another week.....
     
  4. ddebrazza

    ddebrazza Active Member

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    Now, if you were to hold onto the other 1000 until the price got back up to 0.85 and sold the last 1000 at 0.86 or more then you would be able to profit off the total trade.... Hope that makes more sense. But at the time you are selling you have 1000 sold at a loss and 1000 more only worth 0.65 each.
     
  5. urbnsr

    urbnsr New Member

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    I have an option to sell "last in, first out". I have never used this option, but assume this sale would show a $0.15 profit.
     

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