How to use the calculator
- Optionally type a ticker and pick it from the list to fill in today’s price.
- Enter the shares you own and your average cost per share (your broker shows it as “average price” or “cost basis per share”).
- Choose Buy shares to see the new average for a number of shares, or Target average to see how many shares you would need.
The formulas
new average = (shares owned × average cost + new shares × price) / (shares owned + new shares)
shares needed = shares owned × (average cost − target) / (target − price)A target can only be reached if it lies between today’s price and your current average. The closer the target is to today’s price, the more shares it takes; reaching the price itself would take an unlimited number.
Example: 100 shares at $50, now trading at $40
| Buy | Cost | New average | Rise needed to break even |
|---|---|---|---|
| Nothing | – | $50.00 | +25.0% |
| 50 shares | $2,000 | $46.67 | +16.7% |
| 100 shares | $4,000 | $45.00 | +12.5% |
| 200 shares | $8,000 | $43.33 | +8.3% |
Doubling the position cuts the rise needed to break even from 25% to 12.5%, but it also doubles the money riding on this one stock: a further 20% fall would now cost $1,600 instead of $800.
Averaging down: pros and cons
- When it can make sense: you still believe in the company after checking why the price fell, the position stays within the share of your portfolio you planned, and you would buy it today even if you didn’t own it.
- When to be careful: the business has changed for the worse, or you are buying mainly to get back to even. Your break-even price doesn’t matter to the market.
- Funds vs single stocks: buying more of a broad index fund after a fall is a common long-term strategy; repeatedly adding to one falling stock concentrates risk.
When the price is above your average cost, the same math shows how much buying more raises your average (averaging up).
Once you sell, the stock profit calculator works out the profit, return and tax on the whole position.
Frequently asked questions
How do I calculate my average cost per share?
Add up what you paid for all your shares and divide by the number of shares. 100 shares at $50 plus 50 shares at $40 cost $7,000 for 150 shares: an average of $46.67.
What does averaging down mean?
Buying more shares of a stock you own after its price has fallen, which lowers your average cost per share and the price needed to break even.
How many shares do I need to buy to lower my average?
Use "Target average": shares needed = shares owned × (average cost − target) ÷ (target − current price). The target has to be between today's price and your current average.
Is averaging down a good strategy?
It depends on why the price fell. It lowers your break-even, but it also puts more money into the same investment. Many investors only average down in diversified funds or when they would buy the stock today anyway.
What is averaging up?
Buying more after the price has risen above your average cost. Your average goes up; the calculator handles this case too.
Does the ticker lookup show live prices?
It fills in the latest end-of-day close from Quotelinks data. You can type any other price, for example the current quote from your broker.
Can I put this calculator on my website?
Yes. It is free for any site. Use the embed code generator at the bottom of this page, copy the code and paste it into your page. Please keep the credit line with the two links under the calculator.
Related calculators
- Stock Profit CalculatorProfit or loss, return, break-even price and tax on a stock trade, including commissions.
- DCA vs Lump Sum CalculatorInvesting all at once versus spreading it out, in steady, crash and volatile markets.
- Graham Number CalculatorBenjamin Graham’s fair value from earnings and book value, with the margin of safety and his tests.
- What If I Had Invested CalculatorWhat an investment in any US stock or ETF in any past month would be worth today, vs the S&P 500.
See all free investing calculators, or add live stock quotes to your site with the free stock widgets.
Add this calculator to your website
The calculator is free to embed on any website, personal or commercial, and works on WordPress, Blogger, Wix, Squarespace, Webflow, Ghost and plain HTML. Choose the options, copy the code and paste it into your page.
Preview: this is how the calculator and the credit line will look on your page
Free for personal and commercial websites. Please keep the “by Quotelinks” credit line under the calculator visible and unchanged, and don’t modify the calculator or present it as your own. The <script> line is optional: it sizes the frame to fit the calculator; if your platform removes scripts, the calculator still works at the fixed height. Results are simple arithmetic on the numbers you enter. For illustration only, not financial advice.