Best execution only share dealing service, no inactivity/quarterly fees? (iweb / XO?)

TCA

You can only value shares you hold based on what you paid for them, not what you sell *other* shares for. The average cost of shares bought, is exactly that. The profit/loss calculation shown by most platforms is showing profit/loss against current market prices for the shares you hold *now*.

bowlhead99

Onedrew wrote: »

Cost of 1 share 15+12.50-20=7.50

You are having a larf with that one

Thrugelmir

Onedrew wrote: »

Cost of 1 share 15+12.50-20=7.50

Suggest you stick to you day job. Wouldn't recommend anything that involves finance or figures. As you wouldn't last a day.

Onedrew

For CGT I add together all the sell contracts in each share for the year and deduct the total of the buy contracts for those shares.

However, I have been using a version of dollar cost averaging to gradually bring down my costs per share in Shell, using range trading between 1600p and 1700p, 1700 and 1800, and 1800 and 1900 etc. As a result I have brought down average cost down (total spent/total holding) from more than £22 to less than £19 so far. Or am I kidding myself? For CGT I will still of course use the method above.

TCA

Your CGT approach is correct and buying more of a share when prices are falling, will decrease your average cost. CGT is charged on profits, which is as you said, sales minus purchases. But you don't deduct a sales price from a cost price to arrive at an average cost.

Onedrew

If I start with £1,000 and buy-sell-buy-sell and end up with £850 and three shares, have those shares not cost me an average £50 each?
I understand the reasoning behind the purchase-only calculation and accept that iWeb are following the industry standard. But a string of a dozen positive and negative numbers added together and divided by 12 produces a correct average of those numbers. Ignoring the negative numbers would not.
Bottom line: Is my method of calculation going to lose me money? I am genuinely struggling to see how, but glad of any advice as to why I should not continue to use total spend/total units held to calculate whether I am selling at an overall profit. Is there a better rule of thumb?

TCA

You're still confusing cost with profit/loss.

Onedrew

Sorry, TCA. I am trying to say that to ensure I make a profit I think I must sell at a price greater than total cost of units divided by total units held. And if I stick to this I cannot go wrong. Or can I? Is there a better rule of thumb?

Thrugelmir

Onedrew wrote: »

accept that iWeb are following the industry standard.

Nothing to do with an industry standard. Is how the figures are calculated in all walks of life. Not just the buying and selling of shares. Rather than labour the same point endlessly. Your time would be better spent accepting what you've been told. Then applying the principle to your shareholdings. To see what your real profit or loss has been on your trading activities.

Onedrew

Re having a larf etc Well, I would have shelled out £7.50 to own one share. That's indisputable.