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Explanation of Cost Price Options
In Sahm, there are two cost price calculation methods: Avg.cost (Average Cost) and Avg.price (Average Price). Below are the formulas and explanations for each:
1. Avg.cost = (Net Buying Amount + Fees)/Holding Shares
- This includes both the buying price and fees per share.
2. Avg.price = Net Buying Amount/Holding Shares
- This only considers the buying price without including fees.
Example Calculation:
- You buy 100 shares of Stock A at $5 per share.
- Later, you sell 10 shares at $7 per share.
- Then, you purchase an additional 100 shares at $6 per share.
- Suppose the stock trading fee is 1% of the transaction amount.
At this point, you are holding 190 shares. Below is the detailed calculation for both cost price methods.
Action | Quantity | Net Amount | Fees |
---|---|---|---|
Buy | 100 | SAR 500 | SAR 5 |
Sell | 10 | SAR 70 | SAR 0.7 |
Buy | 100 | SAR 600 | SAR 6 |
As a result, the calculated outcomes for the two cost price methods are as follows:
Avg. Cost | Avg. Price |
---|---|
{ (500+5) - 10* (500+5)/100 + (600+6) } / (100-10+100) = SAR 5.58 | ( 500- 10* 500/100 + 600 ) / (100-10+100) = SAR 5.53 |
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