algo trading and the ato

Where do we stand with the ATO in reference to ALGO trading?

Presume I am a shareholder in company X. I have bought in over a few years and accumulated 500 000 shares. I now sell 100 000 shares and make a profit. Depending on whether I am a trader or not I will have to pay either capital gain or income tax on that profit. The question is, whether this profit is calculated on the average price for which I bought these shares, or are they sold in the queue in which they were brought.

Now the same scenario applies, but I use my broker and he will buy them for me using algo trading, At the end of the week he has indeed accumulated 100 000 shares, but in the process he has churned my stock back and forth and turned over 300 000 shares. In other words I have sold the same stock. In fact I sold 300 000 and bought 200 000, leaving me a net 100 000 shares. So at the end of the day I receive a bill for the 100 000 shares, and think nothing of it.

However where do I stand in relation to the ATO. Or rather where should I stand. Should the 300 000 I sold be offset against the shares I won and pay the tax, or is nobody including the tax department aware of what is really going on.

The first paragraph of this text is relevant as to how you would calculate your profit in case you would use algo trading. With all this algo churning in 1, 2, 5, or 50 shares has to be offset in the queue in which they were bought? A nice job for the accountants to work out,