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Highest Cost

Trading Term

Highest Cost is a tax lot-matching method that seeks to maximize losses while minimizing gains. Sales are paired based on the following rules:

  1. First, it looks at all possible options for matching a closing trade to an open lot.
  2. If any possible matches would result in a loss, the method chooses the match that results in the largest possible loss.
  3. If no possible match would result in a loss, the method chooses the match that results in the smallest possible gain.

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