🥖 What is Compressed FIFO?
Imagine you're running a bakery.
On Monday, you bake 100 loaves at $10 each, and later that day bake 50 more at $12 each. At the end of the day, you’ve spent a total of $1,600 for 150 loaves, meaning your compressed cost per loaf is $10.67 (=$1,600 ÷ 150).
Two days later, a customer comes in and buys 120 loaves. You use FIFO, so you sell the earliest loaves first, all using that compressed price from Monday.
This is how Gotrade’s Compressed FIFO works:
Each day’s buys are compressed into a single average cost.
When you sell shares on a later day, we calculate cost basis using FIFO, starting with that day’s compressed cost.
🧾 Example: Sell on a Different Day (With Remaining Shares)
Day 1 – Multiple Buys
Buy 100 shares at $10 → $1,000
Buy 50 shares at $12 → $600
End of Day 1 – Compressed Price Calculation
Total Shares: 150
Total Value: $1,600
Compressed Price: $10.67
Day 2 – Additional Buy
Buy 30 shares at $15 → $450
Day 3 – Sell 120 shares
Compressed FIFO Sell Logic:
We apply FIFO starting with Day 1’s 150 shares at $10.67
After selling 120 shares, you still have 60 shares left (30 from Day 1 + 30 from Day 2)
Cost Basis Calculation:
Day 1’s compressed trade value: $1,600
120 shares sold from Day 1 = 120 × $10.67 = $1,280
Remaining Day 1 value = $320 (30 shares × $10.67)
Day 2 value remains untouched = $450
→ Cost Basis After Sale = $320 (Day 1 left) + $450 (Day 2) = $770 → Average Cost = $770 ÷ 60 = $12.83