Scripwise and Tradewise are two different methods of reporting trades & calculating P&L and turnover.
- Scripwise Method: In this approach, you calculate turnover by collating all trades on the particular contract/scrip for the financial year.
- Tradewise Method: In this approach, you calculate the turnover 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) tradewise transactions are given below:
|Company||Trades||Quantity||Buy Value||Sale Value|
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. 6,000-5,000) = -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)
It is important to note that turnover calculation is only required in Business Income (i.e. in case of Intraday and Future & Options transactions)
Note: Futures & Options contains equity, commodity and currency transactions