Average Down Calculator

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What Does "Averaging Down" Mean?

When you already own shares of a stock and the price drops, buying more shares at the lower price reduces your average cost per share. This is called averaging down. The opposite — buying more after the price rises — is averaging up. In both cases, your new average is the total amount invested divided by the total number of shares held.

Knowing your average cost basis matters because it determines your real break-even point. If you bought 10 shares at $50 and then 10 more at $30, your average is $40 — not $50. You don't need the stock to return to $50 to be profitable; you only need it to exceed $40.

How to Use This Calculator

The calculator has two modes:

  • Find my new average — enter your current shares and average price, then the number of new shares and their price. The calculator shows your new blended average immediately.
  • Find shares needed — enter your current position and a target average price you want to reach. The calculator tells you exactly how many shares to buy and at what price to hit that target.

Frequently Asked Questions

Averaging down means buying more shares of a stock after its price has dropped, which lowers your average cost per share. It reduces your break-even point so the stock needs to recover less to be profitable.
Your new average price is the total amount invested divided by the total number of shares held. For example: if you bought 10 shares at $50 and 10 more at $30, your average is ($500 + $300) / 20 = $40.
Not always. Averaging down lowers your cost basis but increases your exposure to a single stock. It makes sense when you have high conviction the stock will recover. It can amplify losses if the stock keeps falling.

Worked Example — New Average

James bought 200 shares of NVDA at $140 each. The stock pulled back to $105 and he decides to buy 100 more shares at the current price. What is his new average cost per share?

Shares held 200 @ $140
Shares to buy 100 @ $105
Total invested $38,500
Total shares 300
New average cost $128.33
Try it with your own numbers →

Worked Example — Shares to Target

Anna holds 300 shares of TSLA with an average cost of $260. The stock is now trading at $185. She wants to bring her average exactly down to $230 — how many shares does she need to buy?

Shares held 300 @ $260
Buy price $185
Target average $230
Additional cost $37,000
Shares to buy 200 shares
Try it with your own numbers →