Stock Average Cost Basis Calculator
Blend two stock purchases into a single average cost per share. Useful when averaging down (or up) to see your new break-even price across both lots.
About this calculator
When you buy the same stock at two different prices, your true cost basis isn't either individual price — it's a share-weighted blend of both lots. This calculator adds the shares and dollars from two purchases separately, then divides total dollars invested by total shares held to find that blended average cost per share, the price the stock needs to reach for your combined position to break even before accounting for fees or taxes. It's the exact math behind averaging down, the strategy of buying more shares after a price drop specifically to pull the average cost basis lower, and behind its mirror image, averaging up, where buying more at a higher price still lowers the bar to profitability compared to holding only the second, pricier lot alone.
The larger a purchase's share count relative to the other lot, the more that purchase's price pulls the blended average toward it — a 500-share buy moves the average far more than a 10-share one, even at an identical price. This calculator only handles two purchases at a time; investors who've bought in three or more separate transactions would need to run the math across all lots together, or chain this calculator's own output back in as one side of a third comparison, to get an accurate blended figure.
Financial Disclaimer
This calculator is for educational purposes only and does not constitute financial advice. Results are estimates based on the inputs provided. Consult a qualified financial advisor before making investment or financial planning decisions.
Inputs
Results
Average cost/share
$40.00
≈ 8 cups of coffee
How to Use This Calculator
- Enter the share count and price of your first purchase.
- Enter the share count and price of your second purchase.
- The average cost is your blended break-even price across both lots.
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How the result changes with First purchase — price/share
| First purchase — price/share | Average cost/share |
|---|---|
| $20.00 | $25.00 |
| $70.00 | $50.00 |
| $130.00 | $80.00 |
| $180.00 | $105.00 |
How this is calculated
Worked example, using the default values
- totalSharesshares1 + shares2shares1 + shares2 = 200
- totalInvestedshares1 * price1 + shares2 * price2shares1 * price1 + shares2 * price2 = 8000
- averageCost(shares1 * price1 + shares2 * price2) / (shares1 + shares2)(shares1 * price1 + shares2 * price2) / (shares1 + shares2) = 40
Engine last updated . Checked against 1 independently-derived test — how we verify calculators.
Frequently Asked Questions
What does 'averaging down' actually accomplish?
Buying additional shares after a price drop pulls your blended average cost basis lower than your original purchase price, which lowers the exact price the stock needs to reach for your overall position to turn a profit. It doesn't change whether the stock's decline was justified — it only changes your personal breakeven math on the total position.
Is averaging down always a smart move when a stock falls?
Not automatically — it works well when the drop is temporary noise unrelated to the company's actual prospects, but it can compound losses if the stock is falling because the underlying business is genuinely deteriorating, since you're then committing more money to a weakening investment rather than a merely cheaper one.
Does this calculator account for brokerage fees or commissions?
No, it only blends the raw share counts and prices you enter, so any per-trade fees or commissions charged on either purchase would need to be added into your effective price per share manually before entering it, or your true breakeven point will sit slightly above the number this tool reports.
How would I handle a third purchase of the same stock?
Treat your first two purchases as one combined lot using this calculator's output as the average price and total shares figure, then run a second calculation pairing that combined lot against the details of your third purchase — the resulting blended average correctly folds in all three transactions regardless of how many separate buys you're combining.
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