What Is Averaging Down?
Averaging down means buying more shares of a stock you already own, after its price has dropped, which lowers your average cost per share. This calculator handles the direct case: you already know how many more shares you're buying and at what price, and you want the resulting average.
Enter what you currently hold on the left, plus the new purchase, and the average updates instantly. If you're solving the reverse problem, working backward from a target average to find how many shares you'd need, use the Target Average Price Calculator instead.
Real Numbers, Step by Step
Buying Equal Shares at a Lower Price
You own 150 shares at a $120.00 average price. The stock drops to $80, and you buy another 150 shares at that price.
New average = (150 × $120 + 150 × $80) ÷ 300 = $100.00 per share
Buying an equal number of shares at a lower price pulls your average exactly halfway between the two prices in this case, because the share counts match. Uneven share counts pull the average further toward whichever purchase was larger.
A Lower Average Isn't the Same as Lower Risk
Averaging down reduces the price your stock needs to reach for you to break even. It does not reduce how much money you have exposed to that stock; buying more only increases it. If the price keeps falling after you average down, you now have more capital at risk than before, not less.
Our full averaging down vs. up strategy guide covers when averaging down is a reasonable, considered decision versus when it becomes what's sometimes called a value trap: adding to a losing position simply because it's now cheaper, with no new information supporting the decision.