Stock average calculator: your average price per share

Written by the Tactfolio research teamPublished 4 min read

The average price of a stock is what you paid per share across all your buys. This stock average calculator adds up the cost of each buy and divides it by the total shares. It works for stocks, ETFs and funds that you bought at different prices.

  • Average price = total cost ÷ total shares.
  • 100 shares at $50 and 50 shares at $40 average $46.67 a share.
  • Buying more after a drop, to lower your average, is called averaging down.
  • A lower average does not mean the price will come back.

Result

Average price per share
$46.67
Total shares
150
Total cost
$7,000.00

How to use the stock average calculator#

Type the number of shares and the price for each buy. You can enter up to four buys and leave the rest empty. The calculator shows your average price per share, your total shares and your total cost.

How do you calculate the average price of a stock?#

Work out the cost of each buy. Add them up. Then divide by the total number of shares.

cost of a buy = shares × price
total cost = cost of buy 1 + cost of buy 2 + ...
average price = total cost ÷ total shares

Don’t take the plain average of the prices. That only works when every buy has the same number of shares.

A worked example#

Say you bought 100 shares at $50. The price fell, and you bought 50 more at $40.

  1. Buy 1 cost: 100 × $50 = $5,000.
  2. Buy 2 cost: 50 × $40 = $2,000.
  3. Total: $7,000 for 150 shares.
  4. Average: $7,000 ÷ 150 = $46.67 a share.

The plain average of $50 and $40 is $45. That is wrong here, because you bought more shares at $50. The stock has to climb back to $46.67 for you to break even, before fees.

How many shares do you need to reach a target average?#

If you know the price you will buy at, you can work out how many shares bring your average down to a target.

shares to buy = shares you own × (current average - target) ÷ (target - new price)

Say you own 100 shares at $50 and want a $45 average by buying at $40. That is 100 × ($50 - $45) ÷ ($45 - $40) = 100 shares. The target must sit between your current average and the new price.

Averaging down or dollar-cost averaging?#

Averaging down means buying more after the price drops, to lower your average. Dollar-cost averaging means putting in the same amount of money on a fixed schedule, whatever the price.

With dollar-cost averaging, the same money buys more shares when the price is low. Say you put $1,000 in at $50 and $1,000 at $40. You get 20 shares, then 25. That is 45 shares for $2,000, an average of $44.44.

For US taxes, each buy can keep its own cost. Mutual fund shares can use the average cost instead. Ask your broker which method your account uses.

Common mistakes with average price#

  • Averaging the prices, not the cost. Use the formula above when buys are different sizes.
  • Averaging down on a broken idea. If the reason you bought is gone, a lower price does not fix it.
  • Letting one stock grow too big. Each buy adds money to the same bet. Size each buy with the position size calculator.
  • Forgetting fees. Add any commissions to the cost to get your true average.

Try it on Tactfolio#

Tactfolio’s stock and ETF strategies don’t average down by feel. They follow written rules that hold US stocks, ETFs or cash, and they rebalance on a schedule you choose. In the Tactfolio strategy builder you can backtest a rule on past prices before you put money in. To see how fast an investment grew each year, try the CAGR calculator. To plan income from your shares, try the dividend calculator. Every tool is on the free trading calculators page.

Common questions#

How do you calculate the average price of a stock?#

Multiply the shares in each buy by the price you paid. Add up those costs. Divide the total by the number of shares. 100 shares at $50 plus 50 at $40 is $7,000 ÷ 150 = $46.67.

Does averaging down lower my risk?#

No. It lowers your average price, but it puts more money into the same stock. If the price keeps falling, your loss grows faster than before.

Does selling shares change my average price?#

With the average cost method, no. The shares you keep still have the same average. Your profit on the sale is the sale price minus that average, times the shares you sold.

Should I include fees in my average price?#

Yes, if you pay them. Add each commission to the cost of that buy. That gives your true cost per share.

Is a lower average price always better?#

Not by itself. A lower average helps only if the stock is still worth owning. Buying more of a falling stock can turn a small loss into a big one.

Sources

Understand the numbers