How to use the average price calculator
- Enter the quantity you currently hold and your average price.
- Enter the price and quantity of the additional purchase and the new average price is calculated instantly.
- Enter a target average to see how many more you must buy at the same price to reach it.
How the calculation works
The average price is total cost divided by total quantity. The formula is (existing quantity × existing average + added quantity × added price) ÷ (existing quantity + added quantity). For example, if you hold 100 shares at 10,000 and buy 100 more at 8,000, the result is (100×10,000 + 100×8,000) ÷ 200 = 9,000. The extra quantity needed to reach a target average T is existing quantity × (existing average − T) ÷ (T − added price). In the example above, setting the target to 9,000 gives a required extra quantity of 100 shares.
Things to know
- Averaging down lowers your average price but also raises the amount invested and your potential loss. Before buying more, check that you can afford it.
- Even if the average falls, you are still at a loss while the current price is below your average.
- When planning staged purchases, calculating in several steps makes comparison easier.
One more example
If you hold 20 shares at an average of 50,000 and buy 30 more at 40,000, the total cost is 1,000,000 plus 1,200,000, or 2,200,000, and the total quantity is 50 shares. The new average price is therefore 44,000. The quantity field accepts decimals, so crypto or fractional trading can be calculated the same way, and if you buy in several steps you can use the new average as the current average of the next calculation.
Notes & limitations
This calculator works from the numbers you enter and does not recommend buying or selling any security or guarantee investment results. Investment decisions and their consequences are your own responsibility.
FAQ
Are fees and taxes included?
No. It calculates only from the prices and quantities you enter and does not include trading fees or taxes. Your real average may differ slightly from your broker's screen.
The target average calculation says "Not possible".
The target average must be between the current average and the additional purchase price. You cannot reach an average below the additional purchase price.
Can I use it for both stocks and crypto?
Yes. The quantity field accepts decimals, so it also works for crypto and fractional trading.