How do you calculate your average share price?

Add up the total cost of every purchase (price × shares for each buy), then divide by the total number of shares. That weighted average is your cost basis per share.

What does averaging down mean?

Averaging down means buying more of a position at a lower price than your first entry, which lowers your average cost per share. It can improve your break-even, but it also increases your exposure — so it should be a planned decision, not a reaction to a loss.

Is averaging down a good idea?

It depends. Averaging down as part of a planned scaling strategy is very different from adding to a losing trade hoping it comes back. The math lowers your average price, but it also raises your risk if the position keeps falling.

Free Stock Average / Average Down Calculator

Result

Average cost per share

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Total shares—

Total cost—

Your average, kept automatically

In Sereo, average in or reduce a position and the cost basis and P&L update themselves — across every trade you've ever made.

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Educational tool only — not investment advice. Trading involves risk of loss.

How the average price is calculated

Your average cost per share is a weighted average: add up what every purchase cost you, then divide by the total shares you hold.

Average = (Σ price × shares) ÷ (Σ shares)

Buy 100 shares at $50 ($5,000) and another 100 at $44 ($4,400), and you hold 200 shares that cost $9,400 — an average of $47.00. Your break-even just dropped from $50 to $47, but you now have twice the exposure.

Averaging down: plan vs. reaction

Lowering your average sounds good, and sometimes it is — if scaling in was your plan from the start. The danger is reactive averaging: adding to a loser because you can't accept being wrong. That turns a small, planned loss into a large, unplanned one.

A lower average isn't a lower riskEvery share you add increases the money at stake. Decide your maximum position and stop before you average — not while the trade is underwater.

Before you add, check the trade still makes sense with the risk/reward calculator, and read Risk management 101.

Stock average calculator

Your buys

Result

Your average, kept automatically

How the average price is calculated

Averaging down: plan vs. reaction