Scripwise and Trade wise P&L
Created by: Shrutika Shah
Modified on: Mon, 2 May, 2022 at 7:27 PM
Scripwise and Trade wise are two different methods of reporting trades, calculating P&L and turnover.
Calculating turnover trade wise is the most compliant way of determining turnover.
Calculating turnover scrip wise makes the turnover calculation easier by combing all the trades in one go.
Scripwise Method: In this approach, turnover is calculated by collating all trades on the particular contract/scrip for the financial year.
Tradewise Method: In this approach, turnover is calculated by summing up the absolute value of profit and loss of every trade done during the financial year.
In both methods, the P&L shall be the same, but there can be a difference in the turnover calculation.
Let us take an example for Equity Intraday & F&O:
Reliance Industries Limited (RIL) trade wise transactions are given below:
Trade wise reporting of Reliance Limited:
Trade:1 Profit/Loss = Sale value- Buy value (i.e. 36,000-34,000) = 2,000 (Profit)
Trade:2 Profit = Sale value- Buy value (i.e. 9,000-5,000) = -1,000 (Loss)
Scripwise Reporting of Reliance Limited:
Total Buy value = INR 40,000 (i.e Trade 1 buy value + Trade 2 buy value)
Total Sale value = INR 41,000 (i.e Trade 1 sale value + Trade 2 sale value)
Total Profit/Loss = INR 1,000 (i.e Trade 1 Profit + Trade 2 loss)
Calculation of Trading Turnover
(by taking above example of RIL)
Here, trading turnover for Intraday & Futures transaction are calculated by summing up all Absolute Profit (i.e. the sum of absolute values of profit or loss)
Trade-wise Turnover = 2,000 + 1,000 = 3,000 (i.e Trade 1 absolute value + Trade 2 absolute value)
Scrip-wise Turnover = 1,000 (i.e absolute value of total profit of reliance scrip)
For Options , trading turnover is calculated by summing up all absolute profit (i.e. the sum of absolute values of profit or loss) plus Premium received on the sale of options
Trade-wise Turnover in Options:
Trade: 1 - Profit of option (i.e Absolute values) + Premium on sale value of option = INR 38,000 (2,000 + 36,000)
Trade:2 - Profit of option (i.e Absolute values) + Premium on sale value of option = INR 6,000 (1,000 + 5,000)
Total turnover = Trade 1 + Trade 2 = INR 44,000
Scrip-wise Turnover in Options:
Total Profit of trade (i.e Absolute values) + Total Premium on sale value of option = INR 42,000 (1,000 + 41,000)
Tip: Turnover calculation is only required in Business Income (i.e. in case of Intraday and Future & Options transactions)
Note: Futures & Options (F&O) include equity, commodity & currency transactions.
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