Use this calculator to determine the average purchase price of your shares across multiple buying transactions. This is particularly useful for investors practicing dollar-cost averaging or simply wanting to understand their blended cost basis.
For investors, knowing the average price at which you've acquired shares of a particular stock is crucial. This metric, often referred to as your "cost basis," helps you understand your profitability, manage your portfolio, and make informed decisions about future buying or selling.
What is Average Share Price?
The average share price is the blended cost of all shares you own in a specific company, taking into account multiple purchases made at different prices. It's calculated by dividing the total amount of money you've invested in those shares by the total number of shares you hold.
Why is it Important?
Profitability Assessment: By comparing your current share price to your average cost, you can quickly see if your investment is currently in profit or loss. If the current market price is above your average price, you're in profit; if it's below, you're at a loss.
Dollar-Cost Averaging (DCA): Many investors use DCA, which involves investing a fixed amount of money at regular intervals, regardless of the share price. This strategy naturally leads to buying more shares when prices are low and fewer when prices are high, often resulting in a lower average cost over time. This calculator helps track the effectiveness of your DCA strategy.
Tax Implications: For tax purposes, your cost basis (average price) is essential for calculating capital gains or losses when you sell shares.
Decision Making: A clear understanding of your average cost can influence decisions about whether to buy more shares (to lower your average cost further), hold, or sell.
How the Calculator Works
Our Share Average Price Calculator simplifies this process for you. You simply input the number of shares and the price per share for each of your purchases. The calculator then performs the following steps:
Calculates Total Cost for Each Purchase: For each entry, it multiplies the 'Number of Shares' by the 'Price Per Share'.
Sums Total Shares: It adds up all the shares from each purchase to give you your 'Total Shares Owned'.
Sums Total Investment Cost: It adds up the total cost from each purchase to give you your 'Total Investment Cost'.
Determines Average Price: Finally, it divides the 'Total Investment Cost' by the 'Total Shares Owned' to present your 'Average Price Per Share'.
Example Scenario:
Let's say you made the following purchases for a particular stock:
Average Price Per Share: $2312.50 / 225 shares = $10.28 (rounded)
This means your average cost for each share is $10.28, even though you bought them at different prices. This calculator helps you quickly arrive at this crucial figure without manual calculations.