Investing
Stock Averaging Down Calculator
Estimate your new average cost, total invested amount, and required rebound after averaging down a stock position.
What does this calculator answer?
Averaging down lowers your average cost by buying more shares at a lower price. The important question is not only the new average, but also how much the new purchase must rebound to reach break-even.
Inputs
Results
New average cost
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Total invested
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Rebound to break even
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Formula
Rebound to break even = (new average cost - new purchase price) ÷ new purchase price × 100
Example
If you own 20 shares at $60 and buy 20 more at $40, your new average cost is $50. The new purchase price would need to rise about 25% to reach that average.
Common mistakes
- Underestimating the rebound needed after a large decline
- Adding capital without checking position concentration
- Treating a lower average cost as a risk reduction by itself
Important note
Averaging down increases position size. This tool is for scenario math only and does not evaluate the stock or business.
Frequently Asked Questions
It lowers average cost, but your profit or loss still depends on the market price and the larger position size.
It shows how far the new purchase price must rise before the combined position reaches the new average cost.
Yes. It can concentrate more capital in a falling asset.