Unequal Option Fills Need a Quantity-Weighted Entry Price

One call fills at $1.10. Four more of the same call fill at $1.25. The five-contract purchase has an average premium of $1.22 per share. Averaging the two prices without their quantities gives $1.175, understating the purchase by $22.50 for standard 100-share contracts.

That error can reverse the apparent result of a trade. If all five calls later sell for $1.20 each, the actual gross loss is $10. The unweighted average would report a $12.50 gain before costs.

The quantity attached to each fill belongs in the entry-price calculation. A fill for four contracts carries four times the weight of a fill for one.

Rebuild the premium from the fills

All amounts are fictional USD. Assume a fictional buy-to-open order for five standard, unadjusted U.S. equity calls. Every contract has the same underlying, $50 strike, expiration, call type and 100-share deliverable. All five fill on one trading day. There are no earlier holdings, closing trades, corrections or other orders in this example.

These are invented execution prices, not current quotes or a suggested purchase. The calls are assumed to be American-style and physically settled. OCC's equity-option specifications describe the standard 100-share unit and per-share premium convention; adjusted contracts require their own terms.

The first fill purchases one contract at $1.10 per share. Its premium debit is 1 x 100 x $1.10 = $110.

The second fill purchases four contracts at $1.25 per share. Its premium debit is 4 x 100 x $1.25 = $500.

The completed order therefore purchases five contracts for $610 before separately charged costs. Divide that debit by the 500 underlying share units represented by the contracts:

Average entry premium = $610 / (5 x 100) = $1.22 per share

Equivalently, multiply each fill price by its contract quantity, add the results and divide by the total contract quantity:

(1 x $1.10 + 4 x $1.25) / 5 = $1.22

The common multiplier cancels in the second formula. That shortcut requires the same contract unit throughout. Mixing different series, adjusted deliverables or unrelated purchases needs separate records and an explicitly defined calculation.

The simple average, ($1.10 + $1.25) / 2, gives each execution record equal weight. It treats the two records as if they represented equal quantities. They do not.

Use the dollar total to check the result

Suppose a later sell-to-close order executes all five calls at an assumed $1.20 per share. Gross proceeds are 5 x 100 x $1.20 = $600. Subtracting the actual $610 entry debit gives a $10 loss.

The weighted-price check agrees: ($1.20 - $1.22) x 500 = -$10.

Using $1.175 instead would calculate ($1.20 - $1.175) x 500 = +$12.50. The $22.50 difference comes entirely from the entry calculation. Neither result includes commissions, fees, interest or tax. Any separately charged entry and exit costs reduce the economic result further; a displayed average execution price should not be assumed to include them.

The $1.20 closing price is another fictional fill, not a midpoint valuation or an available exit. Liquidity and bid-ask spreads explains why a modeled value may differ from an executable price.

Preserve precision and the broker's reporting boundary

A weighted average can contain more decimal places than any individual fill. In a separate fictional example, one contract at $1.01 and two at $1.02 cost $305 before costs. The average is $305 / 300, or $1.016666... per share. Multiplying a display rounded to $1.02 by 300 produces $306, a dollar more than the original fills.

Keep the original amounts and sufficient precision until the calculation is complete. If a display disagrees, inspect its definition, rounding and included charges before concluding that the execution was wrong.

Fidelity's order-help reference describes a reporting service that combines executions into a quantity-weighted record. Its stated eligibility includes domestic stock and option buys and sells, with exceptions. It also describes its own update timing, trade-date grouping and rounding. These are Fidelity's documented reporting rules, not a promise that every broker groups or displays fills identically.

An average for one completed order also differs from an account's average cost after other purchases or sales. Preserve the series, opening or closing instruction, order identifier, execution quantity, price, trade date and separately charged costs. Use the broker's records to resolve corrections and tax-lot treatment. This premium calculation does not establish tax basis or which lot a later partial sale closes.

Check exposure separately from average price

While an order is partly filled, calculate the average only over confirmed fills. One confirmed contract does not become five because the original ticket requested five. Track any working balance separately. OMP's cancellation article explains why a cancel request alone does not settle that balance. For multi-leg packages, the complex-order partial-fill guide addresses a different unit: the strategy's leg ratio.

The five long calls can lose their entire $610 premium before costs if they expire worthless. Exercising all five $50 calls would require $25,000 to purchase 500 shares, apart from the premium already paid. Subsequent share losses have a different boundary from the original option premium. FINRA's options overview explains exercise funding, expiration and assignment risks. Sellers face assignment obligations. Their average premium received does not establish that the account can fund those obligations or place a ceiling on losses.

For an unexplained discrepancy, reconcile the confirmed quantities and dollar amounts with the actual confirmation. The SEC's confirmation-statement bulletin advises checking transaction details and contacting the broker promptly about errors. Ask which executions, charges and rounding rule produced the reported figure.

Sources and scope

Sources checked 21 October 2026, Australia/Brisbane: OCC equity specifications, Fidelity order help, FINRA options overview and the SEC confirmation bulletin. All fills, quantities and outcomes are fictional teaching inputs. Arithmetic assumes unchanged contracts and no exercise, assignment, transaction correction or tax adjustment during the example.

Options Matrix Pro publishes this article and has a commercial interest in its research platform. Internal links are first-party educational resources. This material is general education, not personal investment, legal or tax advice, and recommends no transaction. Options involve risk and are not suitable for every investor. Read the OCC options disclosure document and confirm the actual contract specifications and broker procedures before trading.