
ETF vs Mutual Fund: Which Is Better for Beginners? Explore costs, tax implications, and trading flexibility for informed investment decisions.
Bought the same stock at several prices? Enter each lot and this tool blends them into a single weighted-average cost per share, with a chart of how your cost basis shifts after every purchase.
Written by TopicDrill Editorial Team·Updated June 2026
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The tool tracks two running totals as it reads your lots: the number of shares you own and the total dollars you have spent. Your average cost per share is simply the total dollars divided by the total shares, so a large lot bought cheaply moves the blended price far more than a small lot bought expensively.
The bar chart shows the running average after each purchase. Watching that line drift down as you add cheaper lots is exactly what averaging down looks like, while adding lots above your current cost pushes it back up.
Say you buy 100 shares at $50, then 150 at $40, then 200 at $30. You have spent $5,000 plus $6,000 plus $6,000, which is $17,000 for 450 shares. Dividing gives an average cost of about $37.78 per share, well below your first purchase price even though you never sold a thing.
A lower average cost feels good, but it does not change the quality of the company you own. Decide whether you would buy the stock fresh at today's price before adding to a losing position. For the official view on cost basis and how it affects taxes, see the IRS guide to capital gains and losses. Once you know your average, estimate your gain with our stock profit calculator.
It is a weighted average, not a simple average of the prices. Add up the money spent on every lot, which is shares times price for each buy, then divide that total cost by the total number of shares. Lots with more shares pull the average toward their price.
Averaging down is buying more of a stock after the price has fallen so your blended cost per share drops. It lowers the price the stock needs to reach for you to break even, but it also puts more money into a position that has been losing value, so it raises your risk if the decline continues.
If you want your true break-even price, yes. This tool averages the share prices you enter, so to fold in commissions you can spread each fee across the shares in that lot and add it to the price before entering it. With most brokers now charging zero commission on stocks, the difference is often negligible.
Under the average-cost method your per-share cost basis stays the same when you sell part of a position. Selling reduces the number of shares you hold but does not change what each remaining share originally cost you on average. Some tax methods such as specific-lot identification work differently.

ETF vs Mutual Fund: Which Is Better for Beginners? Explore costs, tax implications, and trading flexibility for informed investment decisions.

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