Calculate the weighted average price of your stock purchases. Add multiple transactions to find your true cost basis per share.
Add your buy transactions to calculate the average price
Add your purchase transactions to calculate the weighted average price per share.
Average cost is a common method for determining cost basis.
This is the weighted average price per share.
A stock average calculator helps you determine the weighted average price you paid for a stock when you've made multiple purchases at different price points. It's an essential tool for understanding your true cost basis, making informed buy/sell decisions, and calculating capital gains for tax purposes [citation:3][citation:11].
When you buy the same stock multiple times at different prices, simply looking at one purchase price doesn't give you the full picture. Your weighted average price tells you the true cost per share, taking into account how many shares you bought at each price point [citation:2].
This is crucial for evaluating your investment performance, deciding whether to buy more, hold, or sell, and for accurate tax reporting when you eventually sell your shares [citation:9][citation:11].
Averaging down means buying more shares at a lower price than your previous purchase. This reduces your average cost per share and can improve your potential profit if the stock recovers [citation:7].
Averaging up means buying more shares at a higher price. This increases your average cost but may still be worthwhile if you believe the stock will continue to rise [citation:7].
| Transaction | Quantity | Price per Share | Total Cost |
|---|---|---|---|
| Purchase 1 | 150 shares | ₹100 | ₹15,000 |
| Purchase 2 | 250 shares | ₹200 | ₹50,000 |
| Purchase 3 | 100 shares | ₹300 | ₹30,000 |
| Total | 500 shares | — | ₹95,000 |
| Weighted Average Price | ₹190 per share | ||
In this example, the weighted average price is ₹190 per share, calculated as ₹95,000 ÷ 500 shares. This is the true cost basis for your investment [citation:2].
A weighted average price takes into account the number of shares purchased at each price point. Larger purchases have more "weight" in the calculation. It's calculated by multiplying each purchase price by the quantity bought, summing all these amounts, and dividing by the total number of shares [citation:2][citation:10].
Brokerages may calculate average cost differently. Some include commissions and fees in the cost basis, while others don't. Some use different methods for determining which shares are sold (FIFO, LIFO, or average cost). Always check your broker's methodology [citation:6].
When you sell shares, your capital gain or loss is calculated as the difference between the sale price and your cost basis. The average cost method determines your cost basis per share, which is then multiplied by the number of shares sold to determine the total cost basis for the sale [citation:9].
No. Selling shares does not change your average cost price. The average cost remains the same, and the profit or loss from the sale is converted to realized gain or loss. Only purchases affect your average cost [citation:1].
Yes. The weighted average calculation works for any investment where you've made multiple purchases at different prices, including stocks, ETFs, mutual funds, and even cryptocurrencies [citation:6].
Knowing your average price helps you decide whether to buy more (if the current price is below your average, you may want to average down), hold, or sell (if the current price is above your average and you want to book profits). It also helps you set realistic target prices [citation:11].