diff --git a/app/controllers/transactions_controller.rb b/app/controllers/transactions_controller.rb
index 648565f..613eab0 100644
--- a/app/controllers/transactions_controller.rb
+++ b/app/controllers/transactions_controller.rb
@@ -13,15 +13,16 @@ def new
   end
 
   def create
-    @transaction = @wallet.transactions.build(transaction_params)
-
-    if @transaction.save
-      respond_to do |format|
-        format.turbo_stream
-        format.html { redirect_to transactions_path, notice: "Transaction created successfully!" }
-      end
-    else
-      render :new, status: :unprocessable_entity
+    @transaction = TransactionService.new(@wallet, transaction_params).execute
+
+    respond_to do |format|
+      format.turbo_stream
+      format.html { redirect_to @wallet, notice: "Transaction created successfully!"  }
+    end
+  rescue ActiveRecord::RecordInvalid => e
+    respond_to do |format|
+      format.turbo_stream { render turbo_stream: turbo_stream.replace("transaction_form", partial: "form", locals: { transaction: e.record }) }
+      format.html { render :new, status: :unprocessable_entity }
     end
   end
 
diff --git a/app/services/transaction_service.rb b/app/services/transaction_service.rb
new file mode 100644
index 0000000..5704719
--- /dev/null
+++ b/app/services/transaction_service.rb
@@ -0,0 +1,44 @@
+class TransactionService
+  def initialize(wallet, transaction_params)
+    @wallet = wallet
+    @transaction_params =  transaction_params
+  end
+
+  def execute
+    ActiveRecord::Base.transaction do
+      @transaction = @wallet.transactions.create!(@transaction_params)
+      update_holding
+      @transaction
+    end
+  end
+
+  private
+
+  def update_holding
+    holding = @wallet.holdings.lock.find_or_initialize_by(instrument_id: @transaction.instrument_id)
+
+    if @transaction.buy?
+      handle_buy(holding)
+    else
+      handle_sell(holding)
+    end
+
+    if holding.quantity.zero?
+      holding.destroy!
+    else
+      holding.save!
+    end
+  end
+
+  def handle_buy(holding)
+    new_quantity = holding.quantity.to_f + @transaction.quantity
+    new_total_cost = (holding.quantity.to_f * holding.average_price.to_f) + (@transaction.quantity * @transaction.price)
+    holding.quantity = new_quantity
+    holding.average_price = new_total_cost / new_quantity
+  end
+
+  def handle_sell(holding)
+    raise ActiveRecord::RecordInvalid.new(holding) if holding.quantity < @transaction.quantity
+    holding.quantity -= @transaction.quantity
+  end
+end