Stock Average Calculator.
Average Down Smart.
Enter your position and target price — we'll calculate the exact number of shares you need to buy to lower your average cost basis.
Average Down Calculator
Find the exact shares needed to hit your target average
Your Position
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Fill in your position details and hit Calculate
How It Works
The math behind the calculator
Formula
Additional Shares = (Owned × (Original − Target)) ÷ (Target − Current)Example
You own 100 shares bought at $50. The stock is now at $30. You want to bring your average down to $40.
- Additional shares = (100 × (50 − 40)) ÷ (40 − 30) = 100 shares
- Buy 100 more shares at $30 = $3,000 extra investment
- New total: 200 shares, $8,000 invested
- New average price: $8,000 ÷ 200 = $40 ✓
What is Cost Basis?
Your cost basis (also called average cost or adjusted cost base) is the average price you paid per share across all your purchases. It determines your taxable profit when you eventually sell. A lower cost basis means higher gains — which is why investors use the average down strategy to reduce it.
Cost Basis Formula
Cost Basis = Total Amount Invested ÷ Total Shares OwnedFor example: you buy 50 shares at $100 ($5,000) and then 50 more at $60 ($3,000). Total invested = $8,000, total shares = 100. Your cost basis = $80 per share.
When Should You Average Down on a Stock?
Averaging down stocks means buying more shares after the price has dropped to reduce your average cost. It works best when:
Strong Fundamentals
The company's business is intact — the drop is market noise, not a business problem.
Temporary Sector Weakness
The entire sector is down, not just this stock. Macro headwinds that are expected to reverse.
You Have a Long Horizon
Averaging down works best with 3–5+ year holding periods, not short-term trades.
Position Sizing Allows It
Only average down if you can afford the additional investment without overconcentration.
Avoid averaging down when: The stock is falling due to deteriorating fundamentals, accounting fraud, or structural industry decline (e.g., "catching a falling knife"). Use our calculator to understand the exact position size needed before committing capital.
Frequently Asked Questions
What is the average down calculator used for?▾
The average down calculator tells you exactly how many shares to buy at the current price to reach a target average cost. Instead of guessing, you input your existing position (shares owned and original price), the current market price, and your desired average — the tool instantly calculates the exact number of additional shares needed.
How do I calculate my average stock price?▾
Average stock price = Total amount invested ÷ Total shares owned. Example: you bought 100 shares at $50 ($5,000) and 100 more at $30 ($3,000). Total invested = $8,000 ÷ 200 shares = $40 average price. Our stock average calculator does this instantly for multiple lots.
What is averaging down in stocks?▾
Averaging down is the strategy of buying additional shares of a stock after its price has fallen, thereby reducing your average cost per share. If you paid $80 for a stock that's now at $50, buying more shares at $50 lowers your average below $80 — so you need a smaller price recovery to break even.
How do I calculate cost basis for stocks?▾
For a single purchase: cost basis = purchase price + commissions. For multiple purchases (average cost method): cost basis = total dollars invested ÷ total shares owned. This is the most common method used by mutual funds and retail investors. Our stock cost basis calculator handles multiple purchase lots automatically.
Is averaging down a good strategy?▾
Averaging down can be effective for high-quality stocks in temporary downturns, but it amplifies losses if the stock continues to decline. Professional investors like Warren Buffett use it selectively on high-conviction positions. The key rule: only average down on stocks where you'd be comfortable doubling your position — if you wouldn't buy more, don't average down.
Disclaimer: This calculator is for educational purposes only and should not be considered financial advice. Always consult a qualified financial advisor before making investment decisions.