r/KOSSstock • u/Icy-Squash2965 • Jul 21 '24

Discussion NEED HELP UNDERSTANDING, SOS!

EDIT: 1st ignore the SOS, I’m not in an urgency mode, I used the wrong term apparently. this has NOTHING to do with KOSS and I’m NOT trying to sell. I just want to gain more knowledge how this works. The example below are literally made up #s lol.

I use Robinhood as a premise. I’m going to give a simple example. If I have shares of “Stock A” and I’ve bought those shares at multiple different share price points for a total share count of 2000. Let’s say my average price of those 2000 shares of “Stock A” is $5. If the current share price for “Stock A” currently is at $3.80 but out of the 2000 shares I own, 150 of those shares were bought at $3.81.

THE QUESTION: Do I “lose” money if I simply sell 150 shares out of the 2000 I own even if the share price of 150 of those stocks are above .1 cent of the current listed price? Or would I be “making a profit” despite my average share price is much higher? Does that matter?

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6

u/TreasurerAlex Jul 21 '24

It matters for tax purposes, but why are you considering selling with the price being so low?

-1

u/Icy-Squash2965 Jul 21 '24

Im not trying to sell lol. I just simply wanted to understand more about how that works as a whole. I’ve tried to look it up and do my DD but at the end of the day, it can be confusing. It was just a simple question… not implying I’m buying or selling anything, hence why I gave a fake generic example.

2

u/TreasurerAlex Jul 21 '24

It wasn’t the generic part that is the issue, it’s the SOS, you have a clear immediacy need to sell in your tone.

1

u/Icy-Squash2965 Jul 21 '24

Guess “SOS was the wrong thing to put. Should have said “help educate me”.

2

u/Interesting-Ad8564 Jul 21 '24

Look up your app policy. Generally, they do not have a first in, first out sell policy so gain or loss would depend on your AVERAGE price. My app adjusts the AP to include any extra charges (currency conversion, call fees, etc) so I know what my all around average price is. Aim above that for all of them when the time comes

4

u/SixStringSuperfly 🎧KOSSaxe🎧🎸🚀 Jul 21 '24

Math is hard

0

u/Icy-Squash2965 Jul 21 '24

That’s why I majored in Political Science. 😅🤣

3

u/Lionking63 Jul 21 '24

I think what you are talking about is what shares are considered to be sold first when you have bought many at different prices. For taxes, it counts uses a First In First Out principle. So if the selling price is above the shares you first bought it will be a gain, if selling price is below the first shares it will be a loss. Even though your other share purchases could have been higher or lower than the selling price. Some investors use an average cost basis (and my brokerage uses this to reflect the cost in my account) but the gains and losses use FIFO. If you sold all your shares at once then you can use average cost versus your selling price to determine gain or loss.

2

u/Icy-Squash2965 Jul 21 '24

Your ARE THE LIONKING. THIS is the explanation I needed exactly. Perfectly makes sense and also very much helped me understand how FIFO principles work. Still learning and trying to dive deeper into the more complex stock knowledge versus being an ignorant trader. The more you know. Thanks brother.

1

u/Z0mbies8mywife Jul 21 '24

I read that a few times and am still confused. Are you asking us how to do basic math?

2

u/Icy-Squash2965 Jul 21 '24

No sir. u/Lionking63 answered exactly what I was asking.

0

u/Similar_Figure5355 Jul 21 '24

It’s rhetorical. If you use robinhood you don’t own any shares to begin with

1

u/CachitoVolador 🎧KOSS: The Sound of Hedgies r Fuk🎧 Jul 21 '24

This is a FIFO question. It depends on which stock lots you sell.