Average Down Calculator
Your new cost basis after buying more shares, and how far the stock must move to get you back to even.
From the current price, the stock must move +14.3% to reach your new average cost of $40.00. Averaging down lowers that break-even, but it also increases the money at risk in a position that has already fallen.
Averaging down means buying more shares at a lower price, which pulls your average cost down and lowers the break-even. The new average is total dollars invested divided by total shares, so a purchase moves the average in proportion to its size relative to what you already hold.
Frequently asked questions
Does averaging down improve my odds?
It lowers the price at which you break even, which is arithmetic and certain. Whether that improves your outcome depends entirely on whether the decline was temporary or a signal about the business, which the calculation cannot tell you.
Is dollar-cost averaging the same thing?
No. Dollar-cost averaging is buying on a fixed schedule regardless of price, decided in advance. Averaging down is a discretionary decision to add after a loss, and the psychology behind them is very different.
How do I compute average cost with many purchases?
Add every purchase in dollars, add every share count, then divide. Commissions belong in the dollar total. This calculator handles any number of lots.
Does this affect my taxes?
Average cost is one accepted method for tracking basis, but brokers may default to first-in-first-out or allow specific lot identification, which can produce a different taxable gain. Check how your broker reports it before selling.
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Calculators model hypothetical outcomes from the inputs you provide. They are informational only, not financial, investment, tax, or legal advice.