Average Down Calculator

Frequently asked questions

Everything you need to know about averaging down and cost basis on TheDesperateTrader.

How do I calculate my average cost after buying more?

Add the total dollars spent across all your buys, then divide by the total number of shares. If you bought 100 shares at 10 dollars and 100 more at 7 dollars, you spent 1,700 dollars for 200 shares, so your average cost is 8.50 per share. This calculator does it instantly and can add a current price to show your profit or loss.

What does averaging down do?

Averaging down means buying more of a stock you already own at a lower price, which increases your share count and lowers your average cost per share. It also means putting more money into a position that has moved against you, so it raises your risk. It is a tool, not automatically a good idea.

How far does the stock need to rise for me to break even?

Add a current price and the calculator shows the exact percentage the stock must move up from here to reach your new average cost. That number is often smaller after averaging down, which is the appeal, but it comes with more capital at risk.

Is averaging down a good strategy?

It depends entirely on why the stock fell and your plan. Averaging down on a solid position at support can lower your cost; averaging down on a broken stock just to avoid taking a loss is how small losses become large ones. This is an educational tool, not investment advice.

How do I avoid needing to average down?

Sizing the position correctly up front and using a stop-loss is how disciplined traders avoid the situation. Try our free position size calculator, and use our real-time scanner to catch strength early rather than chasing weakness.