When you buy more of a share at a different price, your average buy price changes. This matters for knowing your real profit or loss, and for deciding whether to buy more. The calculator handles up to three purchases and compares your average with today's price.
How to use the stock average calculator
- Enter the number of shares and the price per share for each purchase. Leave the third purchase at 0 if you only bought twice.
- Optional: enter the current market price to see your profit or loss.
Stock average formula
Average price = (Q1 × P1 + Q2 × P2 + Q3 × P3) ÷ (Q1 + Q2 + Q3)Each purchase is weighted by the number of shares, so a large purchase moves the average more than a small one.
Example
You bought 100 shares at ₹250, then 50 more at ₹200 when the price fell.
- Total shares = 150
- Total invested = ₹25,000 + ₹10,000 = ₹35,000
- Average buy price = 35,000 ÷ 150 = ₹233.33
If the share now trades at ₹230, your holding is worth ₹34,500, a loss of ₹500 (−1.43%). Without the second purchase, your loss at ₹230 would have been 8% instead.
How many shares to buy to reach a target average?
Shares to buy = Current shares × (Current average − Target average) ÷ (Target average − Buying price)To bring the ₹233.33 average down to ₹220 by buying at ₹200: 150 × (233.33 − 220) ÷ (220 − 200) = 100 shares.
A word of caution
Averaging down lowers your average price, but it also puts more money into a stock that is falling. Do it only when you still believe in the company, not just to reduce a loss on paper.
FAQ
What is averaging down?
It means buying more of a stock after its price has fallen, which lowers your average buy price.
Does the average include brokerage and taxes?
No. The calculator uses share prices only. Add brokerage and other charges to the price per share if you want them included.
Can I use it for mutual funds?
Yes. Enter the number of units and the NAV for each purchase instead of shares and price.
How is profit taxed when I sell?
Gains on listed shares are taxed as short-term or long-term capital gains, depending on how long you held them. Check your investment's growth rate with the CAGR calculator.