Learn how to read a holdings - portfolio statement

WHY does this statement exist?

WHY it matters: You buy shares at scattered prices on scattered days. Your brain cannot track "Am I up or down?" across 15 stocks. The statement collapses all that history into one per-stock and one total answer, so you can decide what to hold, add, or sell.

Realised vs Unrealised — the key mental split:

Unrealised P/L = paper gain/loss on stocks you still own (this is what the holdings statement shows).
Realised P/L = actual booked gain/loss from stocks you already sold (this lives on a separate "P/L / tradebook" statement, and is what you pay tax on).

HOW each column is built (derive it from scratch)

Suppose you bought a stock in pieces. Let purchase $i$ have quantity $q_i$ at price $p_i$ .

1. Total quantity — just add the shares you didn't sell: $Q = \sum_i q_i$ Why? Ownership is additive; 3 shares + 5 shares = 8 shares.

2. Invested value — the actual rupees that left your bank: $\text{Invested} = \sum_i q_i \, p_i$ Why? Each lot cost you $q_i p_i$ ; total cost is the sum.

3. Average buy price — reverse-engineer a single price that would give the same total cost: $\bar{P} = \frac{\text{Invested}}{Q} = \frac{\sum_i q_i p_i}{\sum_i q_i}$ Why this and not a simple average of prices? Because a plain average $\frac{p_1+p_2}{2}$ ignores how many shares you bought at each price. The right average is weighted by quantity — a lot where you bought more shares should pull the average harder.

4. Current value — mark everything to today's market price $M$ : $\text{Current} = Q \times M$ Why? If you sold all $Q$ shares now, each fetches $M$ .

5. Profit / Loss (unrealised): $\text{P/L} = \text{Current} - \text{Invested} = Q(M - \bar{P})$ Why the factored form $Q(M-\bar P)$ ? It shows the truth cleanly: profit per share is $(M-\bar P)$ , times the number of shares $Q$ .

6. Return % — scale the gain by what you risked: $\%\text{Return} = \frac{\text{P/L}}{\text{Invested}}\times 100 = \frac{M-\bar P}{\bar P}\times100$ Why divide by invested? ₹5,000 profit on ₹10,000 (50%) is far better than ₹5,000 on ₹5,00,000 (1%). Percentage makes stocks comparable.

Figure — Learn how to read a holdings - portfolio statement

Worked Example 1 — one stock, two buys

You buy TCS:

4 shares @ ₹3,000
6 shares @ ₹3,500 Today's market price = ₹3,800.

Step — Quantity: $Q = 4 + 6 = 10$ . Why? Total shares owned. Step — Invested: $4(3000) + 6(3500) = 12000 + 21000 = ₹33{,}000$ . Why? Actual cash spent. Step — Avg price: $\bar P = 33000/10 = ₹3{,}300$ . Why weighted? You bought more at ₹3,500, so avg sits above the midpoint ₹3,250. Step — Current value: $10 \times 3800 = ₹38{,}000$ . Why? Sell-all value today. Step — P/L: $38000 - 33000 = +₹5{,}000$ . Or $10(3800-3300)=₹5000$ . Why match? Two forms of the same identity. Step — Return: $5000/33000 \times 100 = 15.15\%$ . Why? Gain per rupee invested.

Worked Example 2 — a loss + spotting a mistake

You hold INFY: 20 shares, avg price ₹1,600, market price ₹1,450.

P/L $= 20(1450 - 1600) = 20(-150) = -₹3{,}000$ . Why negative? Market below your cost → paper loss. Return $= -150/1600 \times 100 = -9.375\%$ .

Portfolio total (Ex.1 + Ex.2):

Total invested $= 33000 + 32000 = ₹65{,}000$
Total P/L $= 5000 - 3000 = +₹2{,}000$
Portfolio return $= 2000/65000 \times 100 = 3.08\%$

Reading the LTP, Day change & other columns

Forecast-then-Verify (do before revealing)

You hold 50 shares, avg ₹200, LTP ₹230. Forecast: P/L? Return %?

Recall Reveal

P/L $=50(230-200)=₹1{,}500$ . Return $=30/200\times100=15\%$ .

Recall Feynman: explain to a 12-year-old

Imagine you collect toy cars. Some you bought for ₹10, some for ₹20. Your "holdings statement" is a chart saying: how many cars you have, the average price you paid, what each is worth in the shop today, and whether you'd make money or lose money if you sold them all. Green number = you'd win, red = you'd lose. But you only really win when you actually sell — until then it's just a "maybe."

Flashcards

What does a holdings statement show — realised or unrealised P/L?

Unrealised (paper) P/L on stocks you still own.

Formula for average buy price with multiple lots?

\bar P = \frac{\sum q_i p_i}{\sum q_i}

(quantity-weighted, not a plain price average).

Why is average buy price quantity-weighted, not a simple mean?

Because a lot with more shares should influence your true cost more heavily.

Formula for unrealised P/L in factored form?

\text{P/L}=Q(M-\bar P)

, i.e. shares × profit-per-share.

Current value formula?

Q \times M

(quantity × last traded price).

How do you compute return %?

\frac{M-\bar P}{\bar P}\times100

= P/L ÷ Invested × 100.

LTP stands for?

Last Traded Price — the current market price used to value holdings.

Difference between Day P&L and Overall P&L?

Day P&L uses yesterday's close; Overall P&L uses your average buy price.

How to get portfolio return across stocks?

Total P/L ÷ Total Invested × 100 (value-weighted, NOT average of the % returns).

When does unrealised profit become real money?

Only when you sell the shares (then it becomes realised P/L, and is taxable).

Connections

Realised vs Unrealised Profit and Loss
Demat Account Basics
Weighted Average and Averaging Down
Capital Gains Tax — Short vs Long Term
Contract Note and Tradebook
Order Types — Market vs Limit

Concept Map

Hinglish (regional understanding)

Intuition Hinglish mein samjho

Holdings statement basically ek snapshot hai — abhi is waqt tumhare paas kaun-kaun se shares hain aur unki kya position hai. Har row me quantity, average buy price, current market price (LTP), invested value, current value aur profit/loss diya hota hai. Ek hi line me sab kuch samajh aa jata hai: agar main aaj sab bech doon, to fayda hua ya nuksan.

Sabse important cheez samajhna: is statement ka P/L unrealised hota hai — matlab paper profit. Green number dekhke khush mat ho jao, kyunki jab tak tum sell nahi karte, wo paisa tumhare haath me nahi aaya. Jab actually sell karoge, tab wo realised ban jaata hai, aur usi par tax lagta hai.

Average buy price ka funda dhyaan se: agar tumne alag-alag price par shares liye hain, to simple average galat hai. Sahi formula hai quantity se weighted average — jahan zyada shares kharide, wahan ka price zyada pull karega. Formula: $\bar P = \frac{\sum q_i p_i}{\sum q_i}$ . Fir P/L nikalna easy: $Q(M - \bar P)$ , aur return % ke liye P/L ko invested se divide kar do.

Ek aur common galti: do stocks ke return % ko simple add/average karke portfolio return maan lena. Ye galat hai — portfolio return hamesha total P/L ÷ total invested se nikalte hain, kyunki bade investment wale stock ka weight zyada hona chahiye. Bas yahi chhoti si baat exam aur real trading dono me bacha legi.

Test yourself — Brokerage, Demat & Account Setup

Connections