Average Down Calculator — Stocks & Crypto
Averaging down lowers the weighted purchase price when additional units are bought below the existing average. It also increases exposure and the money at risk; a lower average is not evidence that the investment is better. At a market price of $40, those 300 shares are worth $12,000, leaving a $3,000 unrealized loss before fees. Adding shares did not erase the existing dollar loss. The tool has two purchase inputs and no automatic tax-lot, split or fee processing. Check available capital and concentration before increasing a position.
Updated · Reviewed by Foysal Mostafa
Original Position
Additional Buy
Results
New Average Cost
$46.0000
Total Shares
200
Total Cost
$9,200.00
Avg Reduced By
8.00%
Why Use the Average Down Calculator?
Averaging down lowers the weighted purchase price when additional units are bought below the existing average. It also increases exposure and the money at risk; a lower average is not evidence that the investment is better. Compare the displayed result with the worked example and confirm the assumptions before using it.
Formula Used
Average purchase price = total purchase cost / total unitsWorked Example
Buying 100 shares at $60, 100 at $50 and 100 at $40 costs $6,000 + $5,000 + $4,000 = $15,000 for 300 shares: average $50. The two-purchase calculator can combine the first two trades as 200 shares at $55, then add 100 at $40.
How to Use the Average Down Calculator — Step by Step
- 1
Enter the stated inputs
Use the units shown next to each field. Replace sample rates and rules with values applicable to your instrument and account.
- 2
Check a worked example
Buying 100 shares at $60, 100 at $50 and 100 at $40 costs $6,000 + $5,000 + $4,000 = $15,000 for 300 shares: average $50. The two-purchase calculator can combine the first two trades as 200 shares at $55, then add 100 at $40.
- 3
Interpret the result
At a market price of $40, those 300 shares are worth $12,000, leaving a $3,000 unrealized loss before fees. Adding shares did not erase the existing dollar loss. The tool has two purchase inputs and no automatic tax-lot, split or fee processing. Check available capital and concentration before increasing a position.
What Your Average Down Calculator Results Mean
Calculation basis
Average purchase price = total purchase cost / total units
Interpretation and limits
At a market price of $40, those 300 shares are worth $12,000, leaving a $3,000 unrealized loss before fees. Adding shares did not erase the existing dollar loss. The tool has two purchase inputs and no automatic tax-lot, split or fee processing. Check available capital and concentration before increasing a position.
Average Down Calculator — Frequently Asked Questions
Q.How is this calculated?
Average purchase price = total purchase cost / total units
Q.What example can I use to check the arithmetic?
Buying 100 shares at $60, 100 at $50 and 100 at $40 costs $6,000 + $5,000 + $4,000 = $15,000 for 300 shares: average $50. The two-purchase calculator can combine the first two trades as 200 shares at $55, then add 100 at $40.
Q.What assumptions or limitations matter?
At a market price of $40, those 300 shares are worth $12,000, leaving a $3,000 unrealized loss before fees. Adding shares did not erase the existing dollar loss. The tool has two purchase inputs and no automatic tax-lot, split or fee processing. Check available capital and concentration before increasing a position.
About the Author
Forex Trader & Software Developer · Founder, TradeCalc
Active forex trader since 2019, specializing in risk management and systematic position sizing. Built TradeCalc to replace manual spreadsheets used in live trading. Calculator formulas are checked with worked examples and automated regression tests. Broker-specific rules and execution outcomes still need independent confirmation.
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