Weighted Average Cost Formula
\(\text{Total Capital Invested} = (N_1 \times P_1) + (N_2 \times P_2)\) \(\text{Weighted Average Cost} = \frac{\text{Total Capital Invested}}{N_1 + N_2}\)
Where $N$ represents share count and $P$ represents price per share for each purchase.
Dollar-Cost Averaging Tranche Table
| Purchase Order | Shares Purchased | Price Per Share | Total Capital Outlay | Weighted Average Cost Basis |
|---|---|---|---|---|
| Tranche 1 (Initial Buy) | 100 Shares | $150.00 / share | $15,000.00 | $150.00 / share |
| Tranche 2 (Averaging Down) | 150 Shares | $120.00 / share | $18,000.00 | $132.00 / share (Lowered by $18/sh) |
| COMBINED HOLDING | 250 Shares | — | $33,000.00 | $132.00 / share |
How to Use This Stock Average Cost Calculator
- Select your preferred account currency from the header picker.
- Enter Tranche 1 share count and purchase price per share.
- Enter Tranche 2 share count and purchase price per share.
- View total shares owned, total capital invested, and weighted average cost per share.
Frequently Asked Questions
How is weighted average cost per share calculated?
Add the total dollars spent across all buy orders and divide by the total number of shares purchased.
What is Dollar-Cost Averaging (DCA)?
Dollar-cost averaging is an investment strategy where you invest equal dollar amounts at regular intervals, buying more shares when prices are low and fewer when prices are high.
How does averaging down help investors?
Buying additional shares at lower market prices reduces your overall average cost per share, lowering the break-even price required to reach profitability.
What is the difference between simple average price and weighted average price?
A simple average adds prices together and divides by purchase count. A weighted average factors in share quantities, providing the exact true cost basis per share.
Does stock cost basis affect capital gains tax when selling?
Yes! Your cost basis determines your taxable gain or loss upon sale. Tax accounting methods include FIFO (First In, First Out), LIFO, and Specific Identification.
Can this calculator be used for cryptocurrency purchases?
Yes! The weighted average cost math applies identically to stocks, ETFs, mutual funds, and cryptocurrencies.
Is my personal financial data saved on any server?
No. All calculations run locally inside your web browser. History and saved presets are stored strictly in your browser’s local storage.