Stock Price Average Calculator
Use this calculator to determine your average cost basis for a stock purchased at different prices over time.
Purchase Entries
Enter the number of shares and the price paid for each purchase transaction. Leave unused rows at zero.
Understanding Stock Price Averaging
When you invest in stocks, it's common to make multiple purchases of the same company's shares over time. These purchases often occur at different price points, leading to a need to calculate your average cost per share. This average cost, also known as your cost basis, is crucial for understanding your investment's performance and for tax purposes.
What is Average Cost Basis?
Your average cost basis is the total amount of money you've invested in a particular stock, divided by the total number of shares you own. For example, if you buy 10 shares at $100 each, and later buy another 10 shares at $90 each, your average cost per share isn't simply ($100 + $90) / 2. Instead, it's the total money spent ($1000 + $900 = $1900) divided by the total shares owned (10 + 10 = 20), resulting in an average cost of $95 per share.
Why is it Important?
- Performance Tracking: Knowing your average cost helps you quickly assess whether your investment is currently profitable (current price > average cost) or at a loss (current price < average cost).
- Dollar-Cost Averaging (DCA): This strategy involves investing a fixed amount of money regularly, regardless of the stock's price. Over time, DCA helps reduce the impact of market volatility by ensuring you buy more shares when prices are low and fewer when prices are high, often leading to a lower average cost per share.
- Tax Implications: When you sell shares, your capital gains or losses are calculated based on your selling price minus your cost basis. An accurate average cost basis is essential for correct tax reporting.
How to Use This Calculator
Our Stock Price Average Calculator simplifies the process of finding your average cost basis. Simply enter the number of shares and the price per share for up to five different purchase transactions. If you have fewer than five transactions, leave the unused rows at zero. The calculator will then compute your total shares, total investment, and the all-important average price per share.
Example Calculation
Let's say you made the following purchases for XYZ stock:
- Purchase 1: 50 shares at $25.00 per share
- Purchase 2: 30 shares at $28.50 per share
- Purchase 3: 20 shares at $22.00 per share
Using the calculator:
- Enter "50" for Shares Purchased (1) and "25.00" for Price Per Share (1).
- Enter "30" for Shares Purchased (2) and "28.50" for Price Per Share (2).
- Enter "20" for Shares Purchased (3) and "22.00" for Price Per Share (3).
- Leave Shares/Price (4) and (5) at 0.
The calculator would output:
- Total Shares: 100 shares
- Total Investment: $25.00 * 50 + $28.50 * 30 + $22.00 * 20 = $1250 + $855 + $440 = $2545.00
- Average Price Per Share: $2545.00 / 100 = $25.45
This means your average cost for XYZ stock is $25.45 per share.