Stock Average Down Calculator
Find your new average cost after buying more.
Results update as you type.
How it works
When a stock you own falls in price, buying more shares lowers your average cost per share, a strategy called averaging down, and this calculator finds your new average. You enter the shares and price of your first purchase and of your second purchase, and it returns your new average cost per share, your total shares, and your total cost. The average is simply the combined money spent divided by the combined shares owned. Averaging down reduces your break-even price: since the second purchase is at a lower price, it drags the blended average below your original cost, so the stock does not have to rise as far for you to profit. For example, buying 100 shares at $10 then 100 more at $8 gives an average of $9, so you break even at $9 instead of $10. This can be a sound way to build a position in a stock you believe in at a better price, but it carries real risk: if the stock keeps falling, you are increasing your exposure to a losing position, sometimes called throwing good money after bad. Averaging down works best when the decline is temporary and your original thesis holds, not when the company's fundamentals have deteriorated. Use this to see how additional purchases change your cost basis. Enter both purchases to compute your new average cost.
Average cost = total cost / total shares
The new average cost per share is the combined cost of both purchases divided by the combined number of shares. The total cost is the shares times the price for each purchase, added together. Buying more shares at a lower price pulls the average cost down, which is why this is called averaging down.
Source:Investment analysis
We review all our tools from time to time to ensure accuracy.
Worked example
How to use this calculator
- 1
Enter your values
Enter first purchase — shares, first purchase — price, second purchase — shares and second purchase — price.
- 2
Adjust the options
Fine-tune any options to match your situation.
- 3
Read your result
New average cost per share updates instantly as you type — no button to press.
Frequently asked questions
What does averaging down mean?
Averaging down means buying more shares of a stock you already own after its price has fallen, which lowers your average cost per share. Because the new shares cost less, your blended average drops below your original purchase price, reducing the break-even price the stock must reach for you to profit.
How do you calculate the new average cost?
Add the total money spent on both purchases and divide by the total number of shares. Buying 100 shares at $10 and 100 at $8 costs $1,800 for 200 shares, giving a $9 average. The calculator computes this along with your total shares and total cost from your two purchases.
Is averaging down a good strategy?
It can be, when a quality stock has fallen temporarily and your reasons for owning it still hold, since you buy more at a discount and lower your break-even. But it is risky if the price keeps falling or the company's fundamentals have worsened, because you increase your exposure to a losing position. It is not a way to rescue a bad investment.
How does averaging down affect my break-even price?
It lowers it. Your break-even is your average cost per share, so pulling the average down means the stock needs to rise less for you to recover your money. In the example, averaging down from $10 to $9 means you profit once the price passes $9 instead of having to reach $10.
What are the risks of averaging down?
The main risk is committing more money to a stock that continues to decline, deepening your losses and concentrating your portfolio in a poor performer. If the drop reflects genuine problems with the company rather than temporary market noise, averaging down amplifies the mistake. Always reassess your reasons for owning the stock before buying more.