Stock Average Calculator

How to calculate your stock average

Your stock average — also called cost basis — is the single per-share price that summarizes everything you have paid across multiple buys. It is the weighted average of every purchase: total dollars spent divided by total shares owned. It marks your breakeven, so selling above it books a gain and below it a loss.

Formula: Average Cost = Σ (Price × Shares) ÷ Σ Shares.

1. List every purchase lot — the price you paid and the number of shares.
2. Multiply price by shares for each lot to get the dollars spent on it.
3. Sum the dollars spent across all lots, and sum the shares.
4. Divide total dollars by total shares — that is your weighted-average cost per share.

Worked example

You buy 10 shares at $100 = $1,000, then 30 shares at $50 = $1,500. Total cost: $2,500. Total shares: 40. Average cost: $2,500 / 40 = $62.50. The 30-share buy at $50 pulled your average down from $100 to $62.50 because it was a much larger lot.

Dollar-cost averaging vs averaging down

Dollar-cost averaging (DCA) is buying a fixed dollar amount on a fixed schedule regardless of price — a long-term discipline that smooths your entry over time. Averaging down is buying more shares after a sharp price drop to lower your average. DCA is mechanical and emotion-free; averaging down is a deliberate bet that the price decline is temporary. Use the same calculator for both — it does not care why you are buying.

How to use your average price

Compare your average to the current market price to see your unrealized gain or loss per share. Use it when planning a partial sell — selling shares above your average books a profit, selling below books a loss. Brokerages report your basis to the IRS on every taxable sale, so an accurate average matters for tax planning, especially around year-end harvesting.

How many shares to buy to lower my average

If your average cost is above where you want it, you can lower it by buying more shares at a lower price. The formula for the exact number of shares to buy is: Shares = Existing Shares × (Target Average − Current Average) ÷ (New Buy Price − Target Average).

The result always rounds up to a whole share. Because you buy one extra share, the resulting average lands at or below — never above — your target.

1. Enter all your existing purchase lots in the "Purchases" section.
2. Switch the mode to "Shares to buy" using the toggle at the top.
3. Enter your target average — the cost per share you want to reach.
4. Enter the price at which you plan to buy — it must be below your target average.
5. Click Calculate. The result shows the number of whole shares to buy and the actual average you will achieve.

When averaging down is not possible

Two conditions make a target average unreachable. First, your new buy price must be strictly below your target average — you cannot lower your average to $80 by buying at $80 or above. Second, the target must be below your current average — buying at any price pulls your average toward that price, so a target above your current average cannot be reached by buying lower. If either condition is violated, the calculator shows an error rather than a nonsense number.

Limitations

The simple weighted average ignores commissions, dividend taxes, and reinvestments. For a complete trade economics view including fees, dividends, and after-tax ROI, use our Stock Profit Calculator. The average is also irrelevant when the underlying business has changed — do not let a low average price keep you in a deteriorating company.

Track your basis, ignore the noise

Your average cost is one of the most useful numbers in your portfolio. It anchors your performance accounting, your sell decisions, and your tax reporting. Update it every time you add to a position.