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Order of sales

I noticed something recently when I sold shares in a particular question: I had shares at two prices, and sold some of them. My preference would have been to sell of my the more expensive shares, in which I have higher risk. Predictit automatically did the opposite, and sold off my cheaper shares, saddling me with both higher fees on the profit and a higher risk investment. Is there any way (or could there be any way) to change this setting, so that I will always sell my highest risk shares first?

The method used to liquidate positions is called "FIFO" and it stands for "first in, first out". Shares are sold off in the order they were bought. This is the method used by regulated exchanges in the U.S. PredictIt has adopted the same procedure. At present there are no plans to change this in the future.


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Also, your "risk" is the same regardless of the price you purchased the shares at. The shares themselves are identical and are of equal value on the market. Therefore your risk of holding 50 shares purchased at $0.01 is the same as the risk of holding 50 shares purchased at $0.80. If the market price is $0.85, the value at risk is $0.85 / share as long as you keep the position open.

 

My preference would be to use average cost basis. The problem with FIFO is that if I get into a position, then the market move against me and I go in deeper, then it moves back towards the price where i first bought in and so I reduce the size of my position, this is coded as a loss even if I'm selling at price that is better than my average. The results is that when (technically if, but I'm pretty confident about the ultimate result) the contract gets resolved in my favor, I will get charged fees based on profits that are greater than what I actually made, because they add must cancel out these phantom losses that I incurred when adjusting my position in response to market moves. This isn't the end of the world, but I find it annoying.


Note also average cost basis would be much more transparent, since what it easiest to monitor is the average price for you holding, not the oldest shares you still own. 


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100% agree with gabewell.


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Gabewell, that's the point I mean about higher fees. I didn't articulate it well.
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