Some execution providers use a different method for computing profits and losses (e.g., average price method) or do not retain a correct cost basis for overnight positions. In those cases, the profits and losses P&L your execution provider is showing will not match PropReports. PropReports uses an intra-day First In, First Out (FIFO), followed by overnight FIFO methodology. Although a P&L may appear different, when the entirety of the position is closed out, the traders end P&L will be equal using either accounting method.
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An open position's average price seen in PropReports reflects the most recent execution prices for all shares that have yet to be closed out. If an overnight position is day traded, the matching day traded shares will not affect the average price of the open position at close of the day. This is because of the intra-day and overnight FIFO methodology PropReports uses, as described above.
For a clear example, please review the table below:
| Lot | Day | Type | Exec. Qty | Exec. Price | Position Qty | Average Price | Note |
|---|---|---|---|---|---|---|---|
| 1 | Monday | Buy | 1000 | $10.00 | 1000 | $10.00 | |
| 2 | Monday | Buy | 1000 | $11.00 | 2000 | $10.50 | |
| 3 | Monday | Sell | 500 | $10.75 | 1500 | $10.67 | Open Position: 500 shares at $10.00 and 1000 shares at $11.00. |
| 4 | Tuesday | Buy | 500 | $10.50 | 2000 | $10.63 | |
| 5 | Tuesday | Sell | 500 | $10.75 | 1500 | $10.67 | Note that the Average Open Price is NOT affected by this Daytrade. |
| 6 | Wednesday | Sell | 1000 | $10.70 | 500 | $11.00 | The final 500 shares of the $10.00 lot were closed, and 500 of the $11.00 lot were closed. |
| 7 | Thursday | Sell | 500 | $10.25 | 0 | $0.00 | All shares closed. |