Enter Your Stock Purchases
Add each purchase lot below -- the number of shares and the price you paid per share. The calculator will determine your weighted average cost.
| Lot | Shares | Price per Share ($) | Lot Cost | |
|---|---|---|---|---|
| 1 | -- | |||
| 2 | -- |
Purchase Breakdown
| Lot | Shares | Price/Share | Lot Cost | % of Total |
|---|
How Average Cost per Share Is Calculated
The average cost per share is found by dividing the total amount invested by the total number of shares purchased. This gives a weighted average -- lots where you bought more shares have a greater effect on the average than smaller lots.
Where:
- Total Cost = Sum of (Shares x Price per Share) for each purchase
- Total Shares = Sum of all shares purchased across all lots
Example
Purchase 1: 100 shares at $50.00 = $5,000.00
Purchase 2: 50 shares at $40.00 = $2,000.00
Purchase 3: 75 shares at $45.00 = $3,375.00
- Total Shares: 100 + 50 + 75 = 225
- Total Cost: $5,000 + $2,000 + $3,375 = $10,375
- Average Cost per Share: $10,375 / 225 = $46.11
What Is Dollar-Cost Averaging (DCA)?
Dollar-cost averaging is a strategy where you invest a fixed dollar amount at regular intervals -- for example, $500 every month -- regardless of the stock price at the time. Because the same dollar amount buys more shares when the price is low and fewer when the price is high, DCA naturally lowers your average cost per share over time in volatile markets.
DCA in Action
You invest $500 per month in a stock over four months:
| Month | Price | Amount Invested | Shares Bought |
|---|---|---|---|
| January | $50.00 | $500 | 10.00 |
| February | $40.00 | $500 | 12.50 |
| March | $45.00 | $500 | 11.11 |
| April | $55.00 | $500 | 9.09 |
- Total invested: $2,000
- Total shares: 42.70
- Average cost per share: $46.84
- Simple average of prices: $47.50
The DCA average ($46.84) is lower than the simple average price ($47.50) because more shares were purchased when the price was cheapest.
Benefits of DCA
- Removes timing risk -- you do not need to predict market highs and lows
- Disciplined approach -- automates investment decisions and reduces emotional trading
- Reduces average cost -- buys more shares at lower prices, lowering the average over time
Limitations of DCA
- In consistently rising markets, lump-sum investing may outperform DCA
- Transaction costs (if applicable) multiply with each purchase
- DCA does not protect against losses in a prolonged decline
How Averaging Down Works
Averaging down means buying additional shares of a stock after its price has fallen. By purchasing more shares at a lower price, you reduce the overall average cost per share. This means the stock does not have to recover fully to its original price for you to break even or profit.
Averaging Down Example
Initial purchase: 100 shares at $80.00 = $8,000
Price drops to $60.00. You buy 100 more shares = $6,000
- Total shares: 200
- Total cost: $14,000
- New average cost: $70.00 per share
Without averaging down, the stock would need to recover from $60 to $80 (a 33% gain) to break even. After averaging down, it only needs to reach $70 (a 17% gain).
Risks of Averaging Down
Averaging down increases your position size in a stock that is declining. If the decline continues or the company faces fundamental problems, your losses grow larger. This strategy works best when the price decline is temporary and the company's long-term fundamentals remain intact. It is generally considered risky to average down on speculative or financially troubled stocks.
| Scenario | Averaging Down May Help | Averaging Down May Hurt |
|---|---|---|
| Market-wide correction | Broad dip unrelated to the company | May drop further in a recession |
| Temporary bad news | Short-term overreaction by market | News could signal deeper issues |
| Fundamental deterioration | Rarely | Stock may not recover at all |
Frequently Asked Questions
How do I calculate average cost per share?
Divide the total amount you paid across all purchases by the total number of shares you own. For example, if you bought 10 shares at $50 and 20 shares at $40, your total cost is $1,300 for 30 shares. The average cost is $1,300 / 30 = $43.33 per share.
What is dollar-cost averaging (DCA)?
Dollar-cost averaging is an investment strategy where you invest a fixed dollar amount at regular intervals, regardless of the current stock price. This approach naturally buys more shares when the price is low and fewer when the price is high, tending to lower your average cost per share over time.
What does it mean to average down on a stock?
Averaging down means buying additional shares of a stock after its price has dropped. This lowers your average cost per share, so the stock does not need to recover to its original price for you to break even. However, it increases your exposure and risk if the price continues to decline.
Does average cost per share include fees and commissions?
For tax purposes (cost basis), fees and commissions should be included. Many brokerages now offer commission-free trading, but if you do pay fees, add them to the total cost of each purchase when calculating your true average cost per share.
What is the difference between average cost and cost basis?
Average cost per share is the total amount paid divided by total shares owned. Cost basis is a tax concept that includes the purchase price plus any fees, adjustments, or reinvested dividends. For simple stock purchases without commissions, they are effectively the same.
Does this calculator store my data?
No. All calculations run entirely in your browser. No data is sent to any server, and nothing is stored.
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Privacy
This calculator runs entirely in your browser. No financial data -- including share counts, prices, or portfolio values -- is transmitted or stored anywhere.
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Stock Average Calculator FAQ
How do I calculate average cost per share?
Divide your total cost by the total number of shares. For example, if you bought 10 shares at $50 and 20 shares at $40, your total cost is (10 x $50) + (20 x $40) = $1,300 for 30 shares. Average cost = $1,300 / 30 = $43.33 per share.
What is dollar-cost averaging (DCA)?
Dollar-cost averaging is an investment strategy where you invest a fixed dollar amount at regular intervals regardless of the stock price. When prices are low, you buy more shares; when prices are high, you buy fewer. Over time, this tends to lower your average cost per share compared to making a single lump-sum purchase.
What does it mean to average down on a stock?
Averaging down means buying additional shares of a stock after its price has dropped. This lowers your overall average cost per share, so the stock does not need to recover to its original price for you to break even. However, it also increases your exposure to that stock, which adds risk if the price continues to decline.
Does average cost per share include fees and commissions?
For tax purposes, your cost basis should include any commissions or fees paid. Many brokerages now offer commission-free trading, but if you pay fees, you should add them to the purchase price when calculating your true average cost.
What is the difference between average cost and cost basis?
Average cost per share is the total amount paid divided by total shares owned. Cost basis is a tax concept that includes the purchase price plus any fees or adjustments. For most simple stock purchases without commissions, the two are effectively the same.
Does this calculator store my data?
No. All calculations run entirely in your browser. No data is sent to any server, and nothing is stored.