When you buy the same stock at different prices, your effective cost per share is the weighted average. The calculator computes this from up to three buys, useful for tracking your real cost basis when averaging down or accumulating gradually.
What is Stock Average?
Most investors don't buy a stock all at once. You start with a small position, then add more as the thesis develops or as the price drops. The result is multiple buys at different prices, and your real cost basis is the weighted average — not the simple arithmetic mean.
Knowing this is important for two reasons. First, it tells you the price the stock needs to cross for you to be in profit (your break-even). Second, when you decide to sell, you can compute your gain/loss accurately.
Note: for tax purposes in India, capital gains are calculated using FIFO (First-In-First-Out), not weighted average. The calculator's average is for personal tracking and break-even decisions only — your actual tax filing will use FIFO.
Weighted average price
- Pₙ
- Price of nth buy—rupee price per share
- Qₙ
- Quantity of nth buy—shares purchased
How to use this calculator
Enter price and quantity for each of your buys. Up to three are supported.
Enter Buy 1
Price per share and quantity for your first purchase.
Enter Buy 2
Same for your second purchase. Often this is at a different price after you've decided to add more.
Enter Buy 3 (optional)
If you've made a third purchase, add it. For more than 3 buys, run the calculator iteratively or use a spreadsheet.
Use cases
Averaging down
Stock you bought at ₹500 dropped to ₹350. If fundamentals are intact, buying more lowers your average. Calculator shows the new effective price.
Gradual position building
Buying in tranches over weeks/months. The calculator tracks your aggregate cost.
Break-even calculation
Average price tells you when the stock needs to cross to break even. Useful for setting stop-losses and targets.
Accumulating during corrections
Bear market drops are good for adding quality stocks. Track how your average improves with each buy.
Common mistakes to avoid
Confusing average price with break-even
Break-even = average + brokerage + STT + other charges. Pure average is the lower bound; real break-even is slightly above it.
Using weighted average for tax
Indian tax uses FIFO ordering for capital gains. Your tax filing won't match this calculator's average — verify via your broker's tax statement.
Glossary
- Weighted average
- Average where each value is weighted by its quantity, not just simple arithmetic mean.
- Cost basis
- Your effective cost of acquisition — the average price plus any associated charges.
- Averaging down
- Buying more of a stock as its price falls, lowering your average cost.
- FIFO
- First-In-First-Out — used for tax computation. Earlier-bought shares are treated as sold first.