Share Average Calculator

Do you currently own some stocks but want to add to your current position? Use this tool to see how your current position would be affected based on an additional purchase.

Required Information

Current Position:

Number of Shares (Units):

Price per Share ($):

New Transaction:

Number of Shares (Units):

Price per Share ($):

Result:

What it is

What is Share Averaging?

Create Date: September 12, 2024

Last Modified Date: December 13, 2024

Share averaging is a term that is often used in the financial markets, specifically with stocks and options. It is used when someone is already holding a specific position, then are looking to add to it. When they add to their position it will change their average cost per share and total share count, this calculator makes those values clear for you.

How to Calculate Share Averaging

If you are trying to calculate your new possible share average, you must have the following variables:

Number of shares currently

Current price per share

Number of new shares bought

Price per share of new shares

Then you can use the following formula to find the new average cost per share:

An image of the formula used to calculate a new share cost average after making a new transaction.

Where:

ASP = Average share price

TCV = Total current value

TNV = Total new value

TS = Total shares

Understanding Your Results

Your results will clearly outline the new total amount of shares you have and the new average price per share of them. If you are buying shares at a higher price than your original batch of shares, then the average share price will go up, and vice versa. An important note is that this will only work as it is intended to if you are evaluating the same equity both times. Average share pricing does not work if you have shares of company A and want to buy company B shares now.

How to Use the Share Averaging Tool

If you are trying to calculate your new share average this tool does it for you. To use the tool you have to follow the following steps:

Enter the number of shares that you currently have of a specific stock or equity.

Enter the price per share of those shares.

Enter the number of new shares you may buy of that same company or equity.

Enter the price per share of the new shares.

Hit the calculate button and instantly get your results.

Calculation Example

We really like this new company that is listed on the NYSE and we want to buy more shares of it. We currently have 450 shares at a price of $5.50 per share. We want to buy 500 more shares at its current price of $4.40. We can use this tool to learn what our new price per share would be. First, we will enter our current position of 450 shares at 5.50 per share. Next, we will enter our new position of 500 shares at 4.40 per share. We can now hit calculate and get a new average price per share of $4.92 for our 950 total shares.

Share Averaging - Frequently Asked Questions

If you average up on a position in your portfolio, it can be both good and bad. If you have high conviction in the asset it is a good move, if not it may not be. Only time will tell how it performs.

Downside averaging is when you add to a position when you are already down on it. This can be good as it will lower your cost per share, but you are now more invested in something that is not profitable currently. You are running the risk of being exposed to more losses but will be in the profit zone sooner if it begins to go up since the average cost per share has fallen.

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