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Making a second purchase of AMRN but at different price

  • 05-09-2012 11:41am
    #1
    quirkster
    Registered Users, Registered Users 2 Posts: 331 ✭✭


    Hi,
    Rookie question here please bear with me.
    I am currently long AMRN, and looking to buy more of their stock. My first purchase of them was at $12.25, they are now at $14.64.

    I'm wondering what happens when I make a second purchase of the same stock but at a different price? Is the price of the first purchase and the second purchased averaged out? Or is there another way of them being priced once both purchases have been made?

    A quick response would be greatly appreciated!

    Thanks


Comments

  • #2
    xertpo
    Registered Users, Registered Users 2 Posts: 330 ✭✭xertpo


    quirkster wrote: »
    Hi,
    Rookie question here please bear with me.
    I am currently long AMRN, and looking to buy more of their stock. My first purchase of them was at $12.25, they are now at $14.64.

    I'm wondering what happens when I make a second purchase of the same stock but at a different price? Is the price of the first purchase and the second purchased averaged out? Or is there another way of them being priced once both purchases have been made?

    A quick response would be greatly appreciated!

    Thanks

    As far as I remember its the First in First out (FIFO) rule. So if you sell one share in AMRN following the the second purchase, you're actually selling a share from the first purchase. As such, you calculate the CGT based on the price of the first purchase, not the average.


  • #3
    LiamACA
    Registered Users, Registered Users 2 Posts: 30 ✭LiamACA


    xertpo wrote: »
    As far as I remember its the First in First out (FIFO) rule. So if you sell one share in AMRN following the the second purchase, you're actually selling a share from the first purchase. As such, you calculate the CGT based on the price of the first purchase, not the average.


    spot on


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