Stock Average Calculator (DCA Average Down)
Determine your true cost basis after averaging down or scaling into an equity or crypto position. This calculator combines two separate purchase tranches to show your new volume-weighted average price (VWAP) per share and total capital outlay.
Quantity acquired in initial order tranche
Price paid per share in first transaction
Quantity acquired in second order tranche
Price paid per share in second transaction
Volume-weighted average cost basis across all shares owned
How to Use This Calculator
- Enter the share count and unit execution price of your initial order.
- Enter the share count and unit execution price of your second order.
- Review the combined average price per share and overall cash committed.
- Use the new blended average price as your updated cost basis and breakeven target.
Formula & Calculation Methodology
A volume-weighted arithmetic average accounts for differing purchase quantities, ensuring higher share tranches exert proportional weight on your blended breakeven price.
Worked Example
Bought 100 shares at $50, then averaged down with 150 shares at $35
Frequently Asked Questions
What does "averaging down" mean in stock trading?↓
Averaging down involves purchasing additional shares of a stock as its market price declines. This lowers your average cost basis, requiring a smaller price recovery for the position to reach breakeven.
What is the primary risk of averaging down?↓
Averaging down increases your capital exposure to an underperforming asset. If the company faces structural deterioration rather than temporary volatility, losses can compound significantly.
Does this calculator incorporate brokerage commission fees?↓
This calculation computes pure share price blending. In modern zero-commission trading environments commissions are often negligible, but you can manually add execution fees into your price inputs if applicable.
Can this tool be used for cryptocurrencies with fractional units?↓
Yes. Fractional inputs such as 0.25 BTC or 1.5 ETH are fully supported, computing your volume-weighted token cost basis precisely.
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Source Citation & Disclaimer
Informational tool only; not licensed tax, legal, or financial advice.