Stock Average Down Calculator
Calculate a stock position's weighted average price after adding shares, and compare it with the original average.
Enter prices in USD. No currency conversion is performed.
How the calculation works
Averaging down means adding shares at a price below the average price of an existing position. The combined average moves toward the price of the added shares. Buying above the original average moves the combined average upward instead.
The calculation multiplies each share quantity by its entered average or purchase price, adds those costs, then divides by the combined share count. It reports the arithmetic for the scenario, not a prediction that the market price will recover.
The change percentage compares the new weighted average with the original average. A positive value means the new average is lower. A negative value means it is higher. When the original average is zero, that percentage is undefined.
Change the share quantities or prices to compare scenarios. A price of zero is accepted as a mathematical input, but it may not describe a tradable quote.
Step by step
- Enter the number of shares already held and their average price per share.
- Enter the additional share quantity and its assumed purchase price.
- Read the combined share count, modeled cost, weighted average, and signed change from the original average.
Worked example
Suppose you own 100 shares with an average purchase price of 50 USD per share, then add 100 shares at 30 USD. All prices use USD per share.
The combined position is 200 shares with a modeled total cost of 8,000 USD and a weighted average of 40 USD per share. That average is 20% below the original 50 USD average.
When this calculation helps
Use the calculation to check how a specified additional purchase changes the arithmetic average price of an existing position.
It is useful for comparing share quantities and purchase prices. It does not determine whether a security is suitable or whether a purchase should be made.
Common input checks
Check that the original average price represents the shares you entered and that the added price uses the same currency and per share unit. A stale or mismatched price changes the result.
A lower weighted average does not remove the original investment loss or limit future losses. Review the total shares and modeled cost as well as the average.
Formula
Combined cost = (original shares × original average price) + (additional shares × additional purchase price)
Combined shares = original shares + additional shares
New weighted average = combined cost ÷ combined shares
Change from original (%) = (original average price − new weighted average) ÷ original average price × 100
The weighted average is undefined when combined shares are zero. The percentage change is undefined when the original average price is zero. Calculations use unrounded inputs.
Limits and assumptions
The calculation assumes both share quantities refer to the same security and share unit, and all prices use the displayed currency. It excludes fees, taxes, corporate actions, and lot selection. The weighted average is not necessarily the cost basis used for tax reporting. No market price is fetched.
Terms used
- Original average price
- The total cost of the original shares divided by their quantity, when the quantity is greater than zero.
- Weighted average price
- Total modeled cost divided by total shares after combining the original position and the added shares.
- Position average and tax lots
- The calculator's weighted average display. Actual tax records may use separate purchase lots and applicable local rules.
Related calculations
Stock Average Down Calculator shows a weighted position average. Position Sizing Calculator can model a proposed trade size, while Risk Reward Ratio Calculator compares a trade's possible reward and risk using your own assumptions.
A weighted average is not a tax lot record. Check your broker's lot details for a sale, and use a portfolio rebalancing tool when you want to compare target weights across holdings.
FAQ
How is the new average price calculated?
The calculator adds the modeled cost of the original shares to the cost of the additional shares, then divides by their combined quantity. The worked example above shows each step with round numbers.
Can the result show an average above my original average?
Yes. If the added purchase price is above the original average, the combined weighted average rises. The signed change is then negative because the new average is higher than the original one.
Does averaging down guarantee the position will break even?
No. The calculator only combines the entered quantities and prices. It cannot predict a future market price or guarantee that the position will recover.
Is this weighted average my tax cost basis?
Not necessarily. This display combines the entered position into one average. Tax reporting and sale proceeds may depend on separate lots, account rules, and the rules where you file. Consult your broker records or a qualified tax professional for those details.
Does the calculation include fees or taxes?
No. It uses share quantity and price only. Commissions, spreads, taxes, and other transaction costs are outside the calculation.
Related tools
Position Sizing Calculator models a proposed position size. Risk Reward Ratio Calculator compares reward and risk assumptions. Rebalance Calculator compares portfolio weights with targets.