Stock Average Calculator
Buying more of a position changes your average cost by a weighted average, not a simple midpoint. Enter both purchases and this calculator returns the true average price, total shares, position value and the price at which the combined position breaks even.
Weighted, not halfway
The single most common mistake with averaging is splitting the difference. Buy 100 shares at $60 and 200 at $45 and the average is not $52.50 — it is $50, because the second purchase is twice the size and pulls twice as hard. The calculator above shows both numbers side by side so the gap is visible.
The formula is total money spent divided by total shares held. That is also exactly how your broker computes cost basis, so the number here should match your statement (before commissions).
Averaging down is a position-sizing decision in disguise
Lowering your average feels like progress, and mechanically it is — break-even moves closer. But look at what else moved. The default position started as $6,000 of risk and became $15,000. The break-even price fell 17% while the amount at stake rose 150%. You did not reduce risk; you increased it and relabelled it.
That is not an argument against ever adding. Planned scaling into a position at predetermined levels is a legitimate technique used by good traders. The difference is whether the second purchase was in the plan before the first one went wrong, or invented afterwards to make the screen look better.
The test that separates the two
Ask whether you would open the whole combined position, at today's price, if you held nothing. If yes, adding is sound. If the honest answer is "no, but I'm already in it", the add is being driven by the existing loss rather than by the opportunity — and the loss does not know you own it.
Check the size against your rules
Run the combined position through the position size calculator with your normal risk percentage. Averaging down often produces a position several times the size your own rules would have permitted at entry.
Averaging down is still trading
Each addition is another round trip with its own costs, and cost drag is the documented difference between the most active traders (11.4% a year) and the market (17.9%) across 66,465 households.[1]
The number is the easy part
Everything above is arithmetic, and anyone opening this page gets the same answer. What no calculator can settle is whether you took the trade on these terms, or are describing — afterwards — the version of it that worked out.
That is what a trade recorder is for: the trade committed before it resolves, timestamped and sealed on the spot, on a Merkle-anchored log a stranger can check without kappi's cooperation. The plan you typed here stops being a plan you remember having. $15/month, no free tier.
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Frequently asked questions
How do I calculate my average share price?
Divide total money spent by total shares owned. Each purchase is weighted by its share count, so a larger buy moves the average more than a smaller one.
Why isn't my average just the midpoint of the two prices?
Because the purchases were different sizes. A midpoint is only correct when both buys are for exactly the same number of shares.
Does averaging down reduce my risk?
No — it lowers your break-even price while increasing the capital at stake. The position gets larger, not safer.
Do commissions change the average cost?
They add to your true cost basis. This calculator excludes them; add total commissions to the cost and divide again if you want the exact figure.