Cost Basis Methods

Moomoo offers two cost basis methods for tracking the cost of your securities, diluted cost and average cost.

Diluted Cost:

Diluted cost is a cost basis method that considers all buys and sells within the holding period and their corresponding profit or loss and presents as one diluted cost per share for the position. Both buy and sell executions affect diluted cost. Profits and losses in the security are diluted into the cost price, which could result in a negative cost basis if there are enough losses.

Diluted Cost Formula:

Diluted Cost = (Total Amount of Buy Trades within the Holding Period + Total cash dividend within the Holding Period – Total Amount of Sell Trades within the Holding Period) / Quantity

Average Cost:

Average cost is a cost basis method that averages together the cost of all purchases of the security over the holding period (excluding commissions and fees). In this method, only purchases are considered and is not affected by any profits or losses. Instead, profits or losses with this cost basis method are converted to realized gains or losses.

Average Cost Formula:

Average cost = ((Average Cost Before Purchase x Quantity*) + (Price of Purchase x Quantity**)) / Total Quantity after Purchase

*=before purchase, **=of purchase