Average Price Calculator
Check the size of an additional purchase before placing it. Compare the old position with the new average, total cost, and the rise needed to break even.
Enter your current average, shares, and added buy price, then choose whether to calculate from shares, cash, or a target average. Shares are whole numbers.
If the content is long, scroll within the results area.
What does an average price show?
An average price is the per-share cost basis of the stock you already hold. Multiply the old average by the old share count to get the amount invested so far. Add the added buy price multiplied by the added shares, then divide by the combined share count. That weighted average compresses purchases at different prices into one number, but it is only useful when the trade prices and fees behind it are recorded correctly.
When the added buy price is below the old average, the new average falls. That does not erase a loss. It only moves the break-even price closer to the added buy price, while your cash committed and single-stock exposure grow. When the added buy price is above the old average, the new average rises; that is an average-up purchase rather than averaging down.
This page keeps the arithmetic auditable by showing the before and after share count and total invested amount. The chart and table use the same three price values, so you can compare the result without relying on a visual impression. If you edit an input without pressing Calculate, the last confirmed result remains visible and is marked as stale.
The formula
New average = (old average × old shares + added buy price × added shares) ÷ (old shares + added shares). In the added-shares mode, the entered whole-share count is used directly. In the added-cash mode, cash is divided by the added price, the fractional share is discarded, and the unused cash is shown. In target mode, the required number of shares is rounded up to the smallest whole number that reaches the target. Fees, taxes, slippage, and foreign-exchange costs are outside this model.
New average = (old average × old shares + added price × added shares) ÷ total shares
Worked example
Suppose your old average is $50.00 and you hold 100 shares. If you add 50 shares at $40.00, the old investment is $5,000.00 and the added investment is $2,000.00. Divide the combined $7,000.00 by 150 shares and the new average is about $46.67. It is lower than $50.00 but still above $40.00, so the price must rise about 16.67% from $40.00 to reach the new break-even level.
With the same inputs, choosing a target average of $45.00 reverses the weighted-average formula and rounds the required shares up. The actual result can be slightly below $45.00 because only whole shares are purchased. A target at or below the added buy price is unreachable with a finite purchase, because an average approaches the purchase price but cannot cross it.
Reading the result
The before card fixes the current cost basis and position size. The after card applies the selected basis and adds the calculated shares and cash. The difference in total invested is the new money committed; the difference in share count is the new position size.
Current P&L at the added buy price values the existing shares as if they could be sold at that input price. For example, an old average of $50.00 and an added price of $40.00 means a $10.00 loss per existing share, or $1,000.00 across 100 shares. It is a scenario based on your input, not a live market P&L.
The rise needed to break even starts at the added buy price and measures the percentage move to the new average. It is shown as positive only when the new average is above the added price. Real trading costs can make the practical break-even price higher than this arithmetic result.
The target-average mode shows the minimum whole-share count required by the formula. Before placing an order, also check the tick size, available cash, settlement changes, exchange rate, and execution delay. While the price moves, the actual filled average can differ from the displayed scenario. Treat the result as a planning reference, then write down the intended loss range and total portfolio weight before deciding. Keeping the before-and-after numbers also makes the next review easier.
Important limits
- Averaging down lowers an average price; it does not guarantee that the loss becomes smaller. If the company, filing, or sector outlook is worsening, an added purchase can increase both the loss amount and the position concentration.
- This tool models one additional purchase. For a staged plan across several prices, keep each fill as its own price-and-share record and add them deliberately. An unscheduled purchase made only to reduce discomfort can turn into a larger position without a new thesis.
- The calculator uses whole shares. Fractional-share programs, funds, and instruments on other exchanges may use different units, so check the broker's order rules and fee schedule.
- Cash reserves, acceptable loss, correlation with other positions, and company risk cannot be inferred from an average price. Treat the result as arithmetic, not as a recommendation or a return guarantee.
Calculation and data note
The calculation uses only the prices and share counts you enter. It does not fetch market data, so the displayed values depend on your own verified fills. The page states the whole-share, remainder, and round-up rules so the result can be reproduced. Trading fees and taxes vary by account and market; check your broker statement and include those costs before deciding on a trade.
Frequently asked questions
- Are average price and current price the same?
- No. Average price is your cost basis per share, while current price is the market price now. A current price above the average is an unrealized gain; below it is an unrealized loss.
- Why are shares rounded down in the cash mode?
- The calculator assumes whole shares. It divides your budget by the added price, discards the fractional share, and reports the amount that remains unspent.
- Can I set a target below the added buy price?
- Not for a non-zero existing position with a finite purchase. A new average approaches the added price but cannot move below it, so the target must be above the added price.
- Are fees and taxes included?
- No. They vary by account and transaction, so they are excluded from the basic result. Add them separately when estimating a practical break-even price.
- Does averaging down reduce my loss?
- The gap between the average and the current price can shrink, but the total P&L does not automatically improve because new cash is committed. A further decline increases the larger position's loss.
- Can I use the result as an investment decision?
- Use it to check arithmetic only. It does not evaluate company value, financial condition, market risk, or portfolio concentration, so those questions need a separate review.
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This calculator is an educational arithmetic tool, not investment advice or a trading recommendation. Real costs and outcomes can differ from the inputs. You are responsible for your investment decisions and their results.