Recently in Giottus we have introduced a new feature to calculate Net Cost and Profit/Loss based on the User history. Kindly find the methodology below.
Net Cost is the investment you have made so far to accumulate your current portfolio.
For example you had deposited 10,000 to purchase Tron at Rs.1 each and currently Tron is trading at Rs. 5 each, your net cost will be 10,000.
In case you sell 3000 Tron Rs. 5, you will be getting Rs. 15,000.
You will have 7000 Tron left and the portfolio would be worth Rs. 35,000 (7000X5). You have taken your initial investment of Rs. 10,000 out along with profit of 5,000. So your net cost for the remaining 7000 Tron would be Rs. -5000.
If your net cost shows negative, then Congratulations, You have taken out your investment along with some profits and you are currently trading only with your profits.
Net Cost = Total Buy orders for the coin + Total incoming Deposit for the coin – Total Sell orders for the coin – Total outgoing Withdrawals for the coin + Fees
Total Buy orders for the coin = This the sum total all the Buy orders made.
Total incoming Deposits for the coin = This the sum total all the Deposits made for the coin. The INR value of the coin when the deposit was made is used for the calculations.
Total Sell orders for the coin = This the sum total all the Sell orders made.
Total outgoing Withdrawals for the coin = This the sum total all the Withdrawals made for the coin. The INR value of the coin when the withdrawal was made is used for the calculations.
Fees= Sum total of all the fee paid till now
All the above values are converted to INR before applying the formula.
Lets us take an example to understand.
Mark is a new user who has been active only for a week and has made multiple Deposits and withdrawals over the period. For ease of use, let us assume he has dealt in only 1 asset and that is Tron. For simplicity purpose let us assume he used the Easy Buy and Easy Sell and hence incurred 0 fees.
The value of this Tron on
1 st day = Rs. 1
2 nd day = Rs. 2
3 rd day = Rs. 3
4 th day = Rs. 4
5 th day = Rs. 5
Mark deposited Rs. 10,000 on day 1 and purchased 10,000 Tron @ Rs. 1 each.
Mark deposited 5,000 Tron from an external exchange to Giottus on day 2.
Mark sold 2,000 Tron @ Rs. 3 each on day 3.
Mark withdrew 1,000 Tron on day 5.
On day 5, lets calculate his net cost
Net cost = Total Buy orders for the coin + Total incoming Deposit for the coin – Total Sell
orders for the coin – Total outgoing withdrawals for the coin + Fees
Total Buy orders for the coin = 10,000 * Rs. 1 = Rs. 10,000
Total incoming Deposit for the coin = 5000 * Rs. 2 = Rs. 10,000
Total Sell orders for the coin = 2000 * Rs. 3 = Rs. 6,000
Total withdrawals for the coin = 1000 * Rs. 5 = Rs. 5,000
Fees = 0
On Day 5, Mark has 12,000 Tron in his portfolio valued at 12,000*5 = Rs. 60,000
Net cost = 10,000 + 10,000 – 6,000 – 5,000 = Rs. 9,000
P&L = Current Portfolio value – Net Cost
P&L % = P&L / (Total Buy orders for the coin + Total incoming Deposit for the coin + Fees)
In the above example,
Portfolio value = 12,000 Tron * Rs. 5 = Rs. 60,000
P&L = Rs. 60,000 – Rs. 9000 = Rs. 51,000
P&L % = 51,000 / (20,000) * 100 = 255%
When will we get Negative Net Cost?
In case Mark sells another 5,000 Tron @ Rs. 5 on day 5,
Net Cost = = 10,000 + 10,000 – 6,000 – 5,000 – (5000 * Rs. 5)
Net Cost = Rs. - 16,000
Portfolio = 7,000 Tron * Rs. 5 = 35,000
P&L = Portfolio – Net Cost = Rs. 35,000 – (Rs. -16,000) = 51,000
P&L % = 51,000 / 20,000 * 100 = 255 %
The Net Cost is – 16,000 because Mark has recouped his initial investment and taken out 16,000 in profits also. Out of his total profit of Rs. 51,000 , Rs. 35000 is still invested.
If you have any further doubts, kindly mail to firstname.lastname@example.org