Account Opening
- How do clients in Hong Kong and overseas open accounts
- How to open a company account
- What documents can be used to open an account
- Third-party witness account opening
- How to activate trading permissions
- About consent letter
- How do clients open accounts in immigration
- About address proof
- How to know if my account is opened
- FAQ about online account opening

Account Information
- How to update account information in FUTU HK
- About dormant account

Account Security
- How to change your verified mobile phone number
- What to do if my mobile phone is not at hand or can't receive the verification code
- How to cancel or enable account access notification
- FAQ about Login
- How does Futu protect private data
- Personal information acquisition
- Explanation of the "Guidelines on Reducing and Alleviating the Risk of Hacking Intrusion Related to Internet Transactions"
- How to manage your devices
- Futu Token
  - What is token
  - How to use Futu token
  - Operation guide for binding Futu Token through mobile terminal Futubull
  - Operation guide for binding Futu token by scanning code
  - Forgot the unlock password of the token
  - Has the enabled token application been deleted or reinstalled
  - How to disconnect the token

Account-Related Questions
- What to know about universal account upgrades
- Introduction to client standing authorization
- Introduction to third-party authorization
- Description of risk tolerance assessment
- Introduction to FATCA (Foreign Account Tax Compliance Act)
- Common Reporting Standard (CRS)
- Introduction of the Hong Kong Investor Identification Regime (HKIDR) and Over-the-counter Securities Transactions Reporting Regime (OTCR)

Introduction to the cost basis of positions

Futu provides two methods to calculate the cost basis of securities.

1. Diluted Cost

Diluted Cost refers to the break-even price (excluding commissions and fees) of a stock while you hold it. It considers the profit and loss (P/L) on every trade, both buy and sell, but is not affected by rights issue, etc.

If you hold a long position in a stock and sell it at a price equal to the Diluted Cost, you reach the break-even point and have no net P/L. P/Ls on sell trades will raise or lower Diluted Cost and could even make it negative.

Formulas:

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

Holding periods: For Universal accounts, the holding period is calculated on a daily basis, starting from day T when there is no position at the beginning of the day and a position is held by the end of the day.

Costs are calculated seperately for long positions and short positions.

2. Average Cost

Formula

Average cost = (average cost before buying × quantity + the price of this purchase × quantity) ÷ quantity after the purchase

Implication

It is the average cost of the current position of a stock (excluding commissions and fees). Only purchases are considered. The gain or loss corresponding to the sale of a stock does not dilute the cost price, but is converted to realized gain or loss.

Eg.1. Opening A Position

If the customer does not hold Alibaba (BABA) before TDay, and buy 200 shares at $200/share on T Day, then

Diluted Cost = (Total amount of Buy executions within the holding period - Total amount of Sell executions within the holding period)÷ Quantity

=（200×200-0）÷200

= 200

Average Cost = (average cost before purchase × quantity before purchase + purchase price × purchasing quantity) ÷ the quantity held after purchase

=（0+200×200）÷ 200

= 200

If the stock price rises to $205, compare the positions under the two methods.

Diluted Cost	Market Price	Quantity	P&L
200	205	200	1000
Average Cost	Market Price	Quantity	P&L	Unrealized P&L	Realized P&L
200	205	200	1000	1000	0

Eg.2. Reduce Position(follow eg.1.)

Suppose the customer sells 100 shares at $210/share onT+1 Day, then

Diluted Cost = (Total amount of Buy executions within the holding period - Total amount of Sell executions within the holding period)÷ Quantity

=（200×200-210×100）÷ 100

= 190

Average Cost = unchanged when selling stock = 200, but the profit and loss = (210-200) × 100 = 1000 turns into Realized P&L.

If the stock price rises to 215, compare the positions under the two methods.

Diluted Cost	Market Price	Quantity	P&L
190	215	100	2500
Average Cost	Market Price	Quantity	P&L	Unrealized P&L	Realized P&L
200	215	100	2500	1500	1000

Eg.3. Add Position(follow eg.2.)

If the customer buys 100 shares at $205/share on T+5 Day, then

Diluted Cost = (Total amount of Buy executions within the holding period - Total amount of Sell executions within the holding period)÷ Quantity

=（200×200+205×100-210×100）÷ 200

= 197.50

Average cost = (average cost before purchase × quantity before purchase + purchasing price × purchasing quantity) ÷ the quantity held after purchase

=（200×100+205×100）÷200

= 202.50

If the stock price rises to 215, compare the positions under the two methods.

Diluted Cost	Market Price	Quantity	P&L
197.50	215	200	3500
Average Cost	Market Price	Quantity	P&L	Unrealized P&L	Realized P&L
202.50	215	200	3500	2500	1000

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