Free tools / Average Purchase Price Calculator
Average Purchase Price and Dollar-Cost Averaging (DCA) Calculator
Work out your weighted average purchase price across several transactions, the current result of the position and the price at which you break even.
When you buy more of the same security in several tranches, your real entry price is neither the first nor the last price you paid, but the average weighted by the number of shares. That is what decides whether the position is in profit.
The calculator adds up several transactions and works out the weighted average, the value of the position and the result at the current price you enter. It also shows how high the price has to go for you to break even once commissions are taken into account.
Weighted average, not a simple one
A simple arithmetic average of prices is misleading when the tranches differ in size. Buying 10 shares at 100 and 90 shares at 50 gives a weighted average of 55, not 75, because you bought far more shares in the second tranche.
The weighted average is the sum of price times quantity for each purchase, divided by the total number of shares. Commissions added to the cost raise it slightly, and that is exactly why the break-even point sits higher than the average price on its own.
Averaging down is a decision, not a reflex
Buying more of a falling security lowers your average price and shortens the road back to break-even, but it also increases your exposure to an idea that has not worked so far. It makes sense when the reason for the decline does not undermine the thesis you bought on.
The opposite case, buying more of a rising security, raises your average price but adds capital to a position that is working. Both approaches are legitimate, as long as they follow from a stated assumption rather than from emotion after a look at the chart.
Frequently asked questions
Should commissions be included in the average price?
Yes, if you want to know your real break-even point. The buy commission increases the cost of the position and the sell commission reduces the proceeds, so the break-even price is always higher than the average price of the shares alone.
Does the average price determine the tax when I sell part of a position?
Not everywhere. Many countries, including Poland, apply the FIFO rule: you sell the earliest-bought shares first, and it is their cost that goes into the tax calculation. Other jurisdictions let you identify specific lots or use average cost. Check the rule that applies in your country, as it can change your tax bill significantly.
Does averaging reduce risk?
Averaging in spreads your entry over time and reduces the risk of committing all your capital on a single bad day. What it does not reduce is the risk of the asset itself: if your thesis is wrong, each additional tranche only deepens the loss.
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Numbers are one thing, a thesis is another
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