Calculate Average Stock Price

Weighted Average Price Formula:

\[ \text{Avg Price} = \frac{\sum (\text{Price}_i \times \text{Shares}_i)}{\text{Total Shares}} \]

Price 1:

currency/share

Shares 1:

Price 2:

currency/share

Shares 2:

Price 3:

currency/share

Shares 3:

Average Stock Price:

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What Is Weighted Average Stock Price?

The weighted average stock price calculates the average price per share when shares are purchased at different prices and quantities. It provides a more accurate cost basis than simple averaging by accounting for the number of shares bought at each price level.

2. How Does The Calculator Work?

The calculator uses the weighted average formula:

\[ \text{Avg Price} = \frac{\sum (\text{Price}_i \times \text{Shares}_i)}{\text{Total Shares}} \]

Where:

\( \text{Price}_i \) — Purchase price per share for transaction i (currency/share)
\( \text{Shares}_i \) — Number of shares purchased in transaction i (shares)
\( \text{Total Shares} \) — Sum of all shares purchased across all transactions

Explanation: This method weights each purchase price by the number of shares bought at that price, giving more importance to larger purchases in the final average calculation.

3. Importance Of Average Price Calculation

Details: Calculating weighted average price is essential for determining cost basis, tracking investment performance, calculating capital gains/losses, and making informed buying/selling decisions.

4. Using The Calculator

Tips: Enter up to three different purchase transactions with their respective prices and share quantities. At minimum, one transaction with positive price and shares is required. Prices should be in currency per share, shares should be whole numbers.

5. Frequently Asked Questions (FAQ)

Q1: Why use weighted average instead of simple average?
A: Weighted average accounts for the quantity of shares purchased at each price level, providing a more accurate representation of your actual cost basis.

Q2: How many transactions can I calculate?
A: The calculator supports up to three transactions. For more transactions, you can calculate in batches and then average the results.

Q3: What if I have fractional shares?
A: While the calculator uses whole numbers for shares, you can enter decimal values for fractional shares if needed by adjusting the input step attribute.

Q4: Is this the same as dollar-cost averaging?
A: Dollar-cost averaging is the strategy of investing fixed amounts regularly, while weighted average price is the mathematical result of that strategy.

Q5: How does this help with tax calculations?
A: Weighted average cost basis is used in many jurisdictions for calculating capital gains when selling portions of your holdings.