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Stock Average Calculator Guide
Work out your average cost per share across multiple purchases — the number that determines your real break-even.
Average cost = total invested ÷ total shares
100 shares at $50 plus 100 at $30 = $8,000 ÷ 200 = $40 per share.
Note it is not the average of $50 and $30 unless you bought the same number of each.
Weighted, Not Just Averaged
The mistake is averaging the prices. Buy 50 shares at $100 and 150 at $20 and the mid-point of the prices is $60 — but your actual average cost is $40, because most of your shares came at the low price.
Always divide total money by total shares. The share counts are what weight it.
Averaging Down Cuts Both Ways
Buying more as a price falls lowers your average and lowers the price you need to get back to level. That's real and it's why the technique is popular.
The part that gets skipped: it also increases your position in something that is currently going against you. If the fall reflects a broken business, averaging down converts a small loss into a large one, with perfect efficiency. The technique doesn't know the difference between a good company on sale and a bad company in decline — you have to.
The Question Worth Asking
Would you open this position today, at this price, with this money, knowing what you now know?
If yes, buy more — not because it lowers your average, but because it's a good buy. If no, then lowering your average is just a story you're telling yourself about a position you wouldn't choose. Your average cost is a fact about your history and the market has no opinion on it.
Cost Basis and Tax
This gives the average-cost basis. Many tax systems let you choose which specific lots you sell — FIFO, LIFO or specific identification — and the choice can change your tax bill significantly. If you're selling part of a position built over years, the average is not necessarily what your tax return uses.
Related: stock profit calculator, dividend calculator, average calculator.
These results are estimates for education and planning, not financial advice. Actual returns, rates, and terms vary — check with a qualified professional before making decisions.
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