Cost calculation methods refer to different approaches used to measure and record cost basis during investment activities. By summarizing and calculating transactions such as purchases, sales, and dividends, you can gain a clearer understanding of your actual cost basis, thereby analyzing profit and loss performance more accurately.

Longbridge Securities currently offers two cost calculation methods: diluted cost and average opening cost. You can choose the method that best suits your needs.

1. Introduction to diluted cost

Diluted cost represents your break-even price during the holding period, from opening to closing a position. Every purchase or sale during the holding period may increase or decrease your cost basis. This method takes into account the profit or loss from each transaction during the holding period (excluding commissions and fees, etc.) and considers purchases, sales, and changes due to corporate actions such as dividends.

Calculation formula:

• For long positions: Diluted cost = (Total purchase amount during holding period − Total sale amount during holding period − Cash dividends during holding period) / Current holding quantity
• For short positions: Diluted cost = (Total sale amount during holding period − Total purchase amount during holding period − Cash dividends during holding period) / Current holding quantity

Cost update logic: The diluted cost is updated after every buy or sell transaction.

2. Introduction to average opening cost

The average opening cost represents the cost of your position based only on additional purchases (excluding commissions and fees), without considering position reductions. Any reduction in your position is reflected as a realized profit or loss and does not impact the average opening cost.

Calculation formula:

• Average opening cost = (Previous average cost × Previous quantity + Current purchase amount) / New total quantity

Cost update logic:

• The average opening cost is updated only after a successful opening transaction (including "buy to open" and "sell to open"). It remains unchanged when closing or reducing positions.

3. General rules for cost calculation

Both diluted cost and average opening cost follow the following rules:

• Intraday same-direction trading: If you close a position and then reopen it within the same trading day (e.g., long position → close → long position again), the system treats it as T+0 trading and continues to calculate the cost based on the holding period data.
• Intraday reverse trading: If the direction changes within the same trading day (e.g., short sell → close → long position), the cost is reset to zero after closing, and a new calculation starts when you reopen the position.

4. Examples

The difference between average opening cost and diluted cost lies both in the formulas and update logic. You can choose the cost calculation method that best suits your needs.

Case 1:

You make the following transactions for Stock A:

• March 1: Buy 10 shares at SGD 239, holding 10 shares.
• March 2: Sell 5 shares at SGD 245, holding 5 shares.
• March 3: Buy 10 shares at SGD 240, holding 15 shares.
• March 4: Stock A pays a dividend of SGD 150.

Diluted cost: [(239 × 10) − (245 × 5) + (240 × 10）− 150] / (10 − 5 + 10) = 227.67

Average opening cost: [(239 × 5) + (240 × 10)] / 15 = 239.67

Case 2:

This case involves multiple intraday transactions and a change in position direction.

5. Guide to switching cost calculation methods

Currently, the system supports both the diluted cost and average opening cost calculation methods. By default, diluted cost is used. If you wish to change the calculation method, go to Portfolio > More > Portfolio Settings > Cost calculation and select your preferred method.

Note:

The calculated cost is for reference only, and the assets are subject to settlement statements. If corporate actions or share conversions occur, the calculation of cost and profit/loss may be inaccurate, but this does not affect your actual asset value.