Stock Average Cost Calculator
From two buy lots (shares and price each), compute the weighted average buy price, total shares and total cost — useful for averaging down.
Input Data
Results
At a glance:Merging two buy lots gives a weighted average cost. Total shares = shares1 + shares2; total cost = shares1 × price1 + shares2 × price2; average price = total cost ÷ total shares. It is the blended buy price of the combined holding.
Formula
Total shares = shares1 + shares2.
Total cost = shares1 × price1 + shares2 × price2.
Average price = total cost ÷ total shares.
$$\bar{P} = \dfrac{Q_1 P_1 + Q_2 P_2}{Q_1 + Q_2}$$How to Use
- Enter the first buy's shares and price.
- Enter the second buy's shares and price.
- Read the average price, total shares and total cost.
FAQ
Why use a weighted average instead of adding the two prices and dividing by two?
Because the two buys usually differ in share count, and the larger buy should weigh more. Example: 100 shares at HK$50 plus 150 at HK$40 — averaging 50 and 40 gives HK$45, ignoring that more shares were bought at 40. The correct weighted cost is (100×50 + 150×40) ÷ 250 = HK$44 — closer to 40 because that lot is bigger. Only when both lots are equal in size do the two averages coincide.
Is averaging down a good strategy?
It is a double-edged sword, and the key is why the price fell. If it is only sentiment or a short-term dip while fundamentals stay sound, adding lowers your cost and recovers faster when the price rebounds. But if the fall reflects worsening earnings, a declining industry or structural problems, buying the dips just pours more into a depreciating asset and enlarges the loss. Ask first: is this a cheap good company, or cheap for a reason? Average down as a fundamentals-based decision, not a reflex to lower the average price.
Should transaction costs be counted in the average cost?
Strictly, yes. True holding cost includes brokerage, Hong Kong's stock stamp duty (both sides), trading and settlement fees. These make your real average price slightly above the price-only figure from this calculator; the more frequent and smaller the trades, the larger the fee share. For an accurate break-even, add all fees to total cost before dividing by total shares.
How does weighted average differ from arithmetic average, and when are they equal?
Arithmetic average adds the prices and divides by count, treating both buys as equally important regardless of share count. Weighted average weights each buy by its share count — your true per-share cost is total money spent ÷ total shares, which is inherently weighted. They are equal only when the two (or every) buy has the same share count; otherwise the weighted figure is correct for your break-even. For more than two buys, sum each (shares × price) and divide by total shares.
Can I use this for averaging up (buying higher)?
Yes. The calculator blends two lots regardless of whether the second is lower or higher. Averaging up (e.g. 100@40 then 150@50) raises the weighted average to about HK$46, lifting your break-even. It is a trend-following add-on rather than a dip buy; either way the tool shows your true post-add average cost, which you should re-check against risk and concentration.
Related Tools
References
Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.