Stock Average Calculator
Buying more shares of a stock you already own doesn't just add to your position — it changes the single number that defines your break-even point. This calculator shows exactly how a new purchase shifts your average cost, whether you're averaging down after a dip or simply adding to a winner.
Enter your details to see your new average cost.
How to use this calculator
- Enter the shares you currently own and your current average cost per share.
- Enter the new shares you're planning to buy and the price.
- Click "Calculate new average" to see your updated average cost basis.
How the calculation works
Your new average cost is a weighted average, not a simple one: Average Cost = (Existing Shares × Existing Price + New Shares × New Price) ÷ Total Shares. This weighting matters — buying more shares at the lower price pulls the average down more aggressively than a simple average of the two prices would suggest, because the larger, cheaper lot carries more influence over the final number.
A worked example
Say you own 100 shares at a $50 average cost, and buy 200 more shares at $30. A naive average of $50 and $30 would suggest $40 — but the correct weighted calculation is (100 × $50 + 200 × $30) ÷ 300 = $36.67. The larger new lot at the lower price pulls your average down further than a simple average implies, precisely because you bought twice as many shares at that lower price.
Frequently asked questions
What is "averaging down"?
Buying more shares of a stock after its price has dropped, which lowers your average cost basis — though it also means committing more money to a position that has declined.
Does this account for trading fees?
No, this calculates the pure share-weighted average cost — add any commissions or fees to your total invested figure separately if relevant.
How does this affect my taxes?
Your average cost basis is used to calculate capital gains when you eventually sell (if using average-cost accounting) — see the Capital Gains Tax Calculator to estimate that impact.
Is averaging down always a good strategy?
Not automatically — it can work well for a fundamentally sound stock that's temporarily undervalued, but it increases risk if the price is falling due to a genuine problem with the company. Reassess the original investment thesis rather than averaging down purely to lower the number.
What is the difference between averaging down and dollar-cost averaging?
Dollar-cost averaging is investing a fixed amount on a regular schedule regardless of price, as a general strategy. Averaging down specifically means buying more of a position after its price has dropped, deliberately targeting a lower average cost.