Stock Average Calculator
Average your way to a true cost basis. Enter shares and price per share in dollars for up to three buys (fractional shares welcome); the tool returns your weighted average cost, total shares, and total invested.
Example: with Buy 1: shares 100 · Buy 1: price per share ($) 50 · Buy 2: shares 50 · Buy 2: price per share ($) 40 · Buy 3: shares 0 → Average cost per share: $46.67 average cost per share.
- Total shares150 shares
- Total invested$7,000.00 total cost basis
Computed by the calculator below using its default values. Change any input to see your own numbers.
Average cost = total dollars invested ÷ total shares. This is portfolio math; your broker's tax lots may use FIFO or specific-ID instead.
Why the average is weighted
Your average cost per share is total dollars in divided by total shares out — a share-weighted mean, not an average of the prices. Buy 100 shares at $50 and 50 more at $40 and the average is $46.67, not $45: the $50 lot carries twice the weight because it holds twice the shares.
That average is also your breakeven price, before commissions and taxes. If the stock trades above it, the position is up; below it, down. Adding any per-trade fees into each lot's cost nudges the true breakeven slightly higher.
Averaging down without fooling yourself
Buying more as a stock falls lowers your average — the defaults show a $50 average dropping to $46.67 after one buy at $40. What it doesn't do is recover anything: the earlier loss is unchanged, and you now have more money exposed to the same thesis. The market has no memory of your basis.
Treat each additional buy as a fresh decision at today's price. If you wouldn't open the position now, lowering an average is not a reason to add to it.
How it’s calculated
Average cost per share = (shares1 × price1 + shares2 × price2 + shares3 × price3) ÷ (shares1 + shares2 + shares3) — a share-weighted mean. Total invested is the same numerator. Fractional shares are supported to four decimals. Results are pre-tax and exclude commissions unless you fold them into each lot's price.
This is portfolio arithmetic, not tax advice: for IRS reporting, individual stocks generally use FIFO or specific-lot identification, while the average-cost method is reserved for mutual funds and similar plans.
Averaging down from 100 shares at $50 (buying at $40)
| Extra shares at $40 | Total shares | Average cost |
|---|---|---|
| 0 | 100 | $50.00 |
| 50 | 150 | $46.67 |
| 100 | 200 | $45.00 |
| 200 | 300 | $43.33 |
Computed with average = total cost ÷ total shares.
Common mistakes
- Averaging the prices instead of weighting by shares — (50 + 40) ÷ 2 = $45 is wrong when the lots differ in size; the true figure here is $46.67.
- Leaving out commissions and fees, which belong in cost basis and raise your real breakeven.
- Mixing sells into the lots — this tool averages purchases; a sale removes specific shares under your broker's lot method.
- Assuming this average is what the IRS sees: stock tax lots usually follow FIFO or specific-ID, so your taxable gain can differ from your mental math.
Frequently asked questions
How do you calculate average stock price?
Average cost = total dollars invested ÷ total shares. For 100 shares at $50 plus 50 shares at $40: (5,000 + 2,000) ÷ 150 = $46.67 per share.
Does averaging down recover my losses?
No — it lowers your breakeven but leaves the original loss intact and increases your exposure. It only pays off if the stock actually recovers; the lower average just moves the price at which that recovery makes you whole.
Is my average cost the same as my breakeven?
Essentially yes, before costs: sell above the average and the position gains, below it and it loses. Commissions and taxes shift the real-world breakeven slightly above the raw average.
Is this the cost basis the IRS uses?
Not necessarily. Brokers track individual tax lots, and stock sales typically default to FIFO unless you specify lots; the average-cost method is generally limited to mutual funds. Check your broker's basis reporting or a tax professional before selling.
Can I use fractional shares?
Yes — enter 10.5 shares or any decimal. The math is identical: dollars in divided by shares out, shown to four decimal places of shares.