A computational tool facilitates the determination of the average purchase price of a specific stock, considering multiple transactions executed at varying prices through the Zerodha platform. For instance, if an investor buys 10 shares of a company at 100 and later buys another 10 shares at 120 through Zerodha, the tool computes the average cost per share, factoring in both transactions.
This calculation is critical for investors using Zerodha as it aids in understanding the actual cost basis of their holdings. Accurate cost basis information is essential for profit and loss calculation, tax reporting, and informed decision-making regarding future investments or divestments. Prior to the widespread availability of such tools, investors often relied on manual calculations, which were prone to error and time-consuming.
