Stock Average Down Calculator
Calculate your new average cost basis after buying more shares of a stock at a lower (or higher) price.
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Applications
Stock averaging down is a common investment strategy used when a stock's price drops after the initial purchase. By buying more shares at the lower price, investors decrease their average cost per share, which can lead to a quicker breakeven point or higher profits when the stock rebounds.
The Formula
The average cost basis is calculated by dividing the total cost of all shares purchased by the total number of shares owned: Average Cost = Total Cost / Total Shares. This gives you the new average price per share across all your purchases.
Fun Fact: Averaging down is also known as Dollar-Cost Averaging (DCA), though DCA typically involves regular, set investments regardless of price, whereas averaging down specifically targets price drops to lower the cost basis.
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