How to calculate your average cost
Your blended average cost is the total money you have invested divided by the total number of shares or units you hold. It is a weighted average, not the simple average of your entry prices — a bigger lot pulls the average closer to its price.
Average cost = total invested ÷ total shares
Add a row for every buy, enter the price and quantity, and the calculator sums each lot's price × quantity for you. Optional fees are amortised into the average so the figure reflects your true cost per share.
Worked example
You buy 100 shares at $10, then add
300 shares at $6.
Total shares = 100 + 300 = 400. Total invested = $1,000 + $1,800 = $2,800.
Average cost = $2,800 / 400 = $7.00.
Averaging down vs averaging up
Averaging down means adding to a position at a lower price than your original entry, which drags your average cost down and lowers the price you need to break even. Averaging up means adding at a higher price, raising your average as you build into a winner. The math is the same weighted mean in both cases — only the direction of the new price relative to your average changes. Use it to see exactly where your break-even sits before you commit more capital.
How lot size changes your average
The weighted average is pulled toward whichever lot is bigger. Starting from 100 shares at $10, watch what a second buy at $6 does as it grows:
| Second lot at $6 | Total shares | Blended average cost |
|---|---|---|
| 50 shares | 150 | $8.67 |
| 100 shares | 200 | $8.00 |
| 300 shares | 400 | $7.00 |
| 900 shares | 1,000 | $6.40 |
The bigger the add relative to the original lot, the closer your average drifts to the new price. That is the lever behind averaging down — but a lower average also means more capital committed to a falling position.
What to do with your new average
Your blended average cost is the input to almost every other decision. Drop it into the break-even calculator with your fees to find the exact price that gets you back to flat, into the target price calculator to set an exit for a chosen net gain, and into the position size calculator before any further add so the next lot still fits your risk limit. When you finally exit, the profit calculator turns that average into net P&L.
Frequently asked questions
- How do you calculate average cost across multiple buys?
- Add up the money you spent on every lot (price × quantity for each), then divide by the total number of shares or units you hold. That weighted average is your blended average cost per share — not the simple average of the prices.
- What is the difference between averaging down and averaging up?
- Averaging down means buying more at a lower price than your original entry, which pulls your average cost down. Averaging up means buying more at a higher price, which raises your average. The math is identical either way — it is the same weighted mean.
- Does this calculator include broker fees?
- Yes. Open the "Fees & commissions" section and enter your total fees across all lots. They are amortised into the blended average cost so the figure reflects your true cost per share.
- How many lots can I add?
- As many as you need. Use "+ Add lot" to add another entry row and the × button to remove one. Half-typed or empty rows are ignored, so the average only counts complete lots.
- Why is the weighted average not the midpoint of my two prices?
- Because lot sizes differ. Buying 100 shares at $10 and 300 at $6 is not a $8 average — the larger $6 lot pulls the blend down to $7. The simple midpoint only works when both lots are the same size; otherwise each price is weighted by how many shares you bought at it.
- Does averaging down lower my break-even?
- Yes — when you buy more below your current average, the blended cost drops, and so does the price you need to get back to flat. That is the appeal. The risk is that you are adding money to a position that is already moving against you, so size the add deliberately rather than doubling down on hope.