FIFO (First In, First Out)

FIFO (First In, First Out) is a principle in which the oldest acquisition dates of securities are used first as soon as a sale takes place. If an investor has acquired securities in several tranches at different times and prices and now sells a portion of these securities, the FIFO principle assumes that the securities acquired first are also sold first.

For example, if an investor buys 100 shares at 50 euros in January, 100 shares at 55 euros in February, and 100 shares at 60 euros in March, and then sells 150 shares, the first 100 shares at 50 euros and the next 50 shares at 55 euros are considered sold.

This method affects the calculation of capital gains or losses, as well as the resulting tax implications.