Support Desk

Submit a ticket My Tickets
Login  Sign up

Negative or Low Average Purchase Price

The average purchase price calculation involves the average purchase value for each coin, calculated and compared with the current market value. 

It answers the question: How much would you have to sell your coin for in order to make a profit?

The calculation is as follows:

1st buy (coin amount * purchase price) + 2nd buy (coin amount * purchase price) + ... - 1st sale (coin amount * purchase price) - 2nd sale (coin amount * purchase price)...

The result is an average value in FIAT for all coins you own. If the actual sale price is higher, the line turns green and shows you how much profit you would make with that sale. In the other case, the row will turn red and show you how much you would lose if you sold everything now.

Why is the purchase value negative?

Your purchase value can actually be negative if you've already made so much profit that you can't make a loss. Example: You buy 1,000,000 DVC for $100. 1 week later, 1,000,000 DVC is now worth $400. You sell the half for $200. You've made $100 profit and still have 500,000 DVC left. In this case, your purchase value is negative because you have gained more than your initial purchase. Even if the DVC price falls to 0, you can't be at a loss. You will always come out with a gain of $100 minimum.

So having a negative average purchase price is not a problem, but a great sign!

Why is the purchase price too low?

The higher the remaining quantity of a coin, the more accurate the break even price can be calculated.

If the remaining amount is too small, the break even price is no longer meaningful. Assuming you only have one thousandth of a coin, you would have to sell it for an astronomically high price to reach break even. 

So if someone has a very low residual value, they would have to sell it for a few trillion dollars to get to 0.    

Since it would make no sense to display this, the software instead shows "too low".

Did you find it helpful? Yes No

Send feedback
Sorry we couldn't be helpful. Help us improve this article with your feedback.