📈 Share Average Calculator
Calculate average purchase price of stocks across multiple transactions
Investment Summary
What is Share Average Calculator?
A share average calculator is a financial tool that helps stock market investors calculate the average purchase price of shares bought across multiple transactions at different prices. When you buy the same stock multiple times at varying prices, this calculator determines your average cost per share, which is crucial for understanding your investment position and calculating profit or loss.
Our free share average calculator is essential for investors who practice rupee cost averaging or dollar cost averaging strategies, where they invest fixed amounts regularly regardless of market conditions. By knowing your average purchase price, you can make informed decisions about when to sell, how much profit you've made, or whether to buy more shares to average down your cost.
The calculator uses a weighted average formula that considers both the number of shares and the price paid in each transaction, giving you an accurate average cost basis for your investment portfolio. This is particularly useful for tax calculations, portfolio analysis, and investment strategy planning.
How to Calculate Share Average Price
- Enter First Transaction: Input the number of shares and price per share for your first purchase. The total amount is calculated automatically.
- Add More Transactions: Click "Add Transaction" to add additional purchase entries. Enter quantity and price for each transaction.
- Review Entries: Verify all your purchase transactions are entered correctly. You can remove any transaction using the Remove button.
- Calculate Average: Click "Calculate Average" to get your average purchase price per share and total investment summary.
- View Results: See your average price per share, total shares owned, total investment amount, and number of transactions.
Share Average Calculation Examples
Example 1: Averaging Down Strategy
Amit bought Reliance shares in three transactions:
- Transaction 1: 50 shares @ ₹2,500 = ₹1,25,000
- Transaction 2: 30 shares @ ₹2,300 = ₹69,000
- Transaction 3: 20 shares @ ₹2,200 = ₹44,000
- Total Investment: ₹2,38,000
- Total Shares: 100
- Average Price: ₹2,38,000 ÷ 100 = ₹2,380 per share
Example 2: Systematic Investment Plan (SIP)
Priya invested ₹10,000 monthly in TCS shares for 4 months:
- Month 1: 30 shares @ ₹3,333 = ₹10,000
- Month 2: 28 shares @ ₹3,571 = ₹10,000
- Month 3: 32 shares @ ₹3,125 = ₹10,000
- Month 4: 27 shares @ ₹3,704 = ₹10,000
- Total Investment: ₹40,000
- Total Shares: 117
- Average Price: ₹40,000 ÷ 117 = ₹341.88 per share
Example 3: Bulk and Small Purchases
Rahul made mixed investments in Infosys:
- Transaction 1: 100 shares @ ₹1,500 = ₹1,50,000
- Transaction 2: 10 shares @ ₹1,450 = ₹14,500
- Transaction 3: 5 shares @ ₹1,480 = ₹7,400
- Total Investment: ₹1,71,900
- Total Shares: 115
- Average Price: ₹1,71,900 ÷ 115 = ₹1,494.78 per share
Share Average Calculation Formula
Weighted Average Formula
Average Price per Share = Total Investment Amount ÷ Total Number of Shares
Where:
- Total Investment = Sum of (Quantity × Price) for all transactions
- Total Shares = Sum of all share quantities purchased
Detailed Calculation Steps
| Step | Action | Formula |
|---|---|---|
| 1 | Calculate each transaction amount | Amount = Quantity × Price per Share |
| 2 | Sum all transaction amounts | Total Investment = Σ(Quantity × Price) |
| 3 | Sum all share quantities | Total Shares = Σ(Quantity) |
| 4 | Calculate average price | Average = Total Investment ÷ Total Shares |
Profit/Loss Calculation
Once you know your average price, you can calculate profit or loss:
- Current Value: Total Shares × Current Market Price
- Profit/Loss: Current Value - Total Investment
- Profit/Loss %: (Profit/Loss ÷ Total Investment) × 100
- Break-even Price: Average Price per Share
Investment Strategies Using Average Price
- Averaging Down: Buying more shares when price drops to reduce average cost
- Averaging Up: Buying more shares when price rises (momentum strategy)
- Rupee Cost Averaging: Investing fixed amount regularly regardless of price
- Value Averaging: Adjusting investment amount to reach target portfolio value
Frequently Asked Questions About Share Average Calculator
How do you calculate average share price?
To calculate average share price, divide your total investment amount by the total number of shares purchased. For example, if you bought 50 shares at ₹100 and 30 shares at ₹120, your average price is (50×100 + 30×120) ÷ (50+30) = ₹8,600 ÷ 80 = ₹107.50 per share.
What is averaging in stock market?
Averaging in stock market refers to buying the same stock multiple times at different prices to achieve a better average purchase price. Averaging down means buying more when price falls to reduce average cost. Averaging up means buying more when price rises, often used in momentum strategies.
Should I average down on losing stocks?
Averaging down can be beneficial if the stock's fundamentals remain strong and the price drop is temporary. However, avoid averaging down on stocks with deteriorating fundamentals or in a long-term downtrend. Always research thoroughly before adding to losing positions.
How to calculate profit after averaging?
Calculate profit by: (Current Market Price - Average Purchase Price) × Total Shares. For example, if your average price is ₹100, you own 100 shares, and current price is ₹120, your profit is (₹120 - ₹100) × 100 = ₹2,000.
What is the difference between simple average and weighted average?
Simple average adds all prices and divides by number of transactions, ignoring quantity. Weighted average (used in share calculations) considers both price and quantity, giving more weight to larger transactions. Weighted average is more accurate for stock investments.
Can I use this calculator for mutual funds?
Yes, this calculator works for mutual funds, ETFs, or any investment where you make multiple purchases at different prices. Enter the number of units and NAV (Net Asset Value) for each purchase to calculate your average cost per unit.
How does averaging help in volatile markets?
Averaging helps reduce the impact of market volatility by spreading purchases across different price points. This strategy, called rupee cost averaging, ensures you don't invest all money at market peaks and benefit from buying more units when prices are low.
What is the best averaging strategy?
The best strategy depends on your goals. Systematic Investment Plan (SIP) works well for long-term wealth creation. Averaging down suits value investors buying quality stocks at lower prices. Averaging up works for momentum traders. Choose based on your risk tolerance and market view.
Should I include brokerage in average calculation?
For accurate cost basis calculation, yes. Add brokerage, STT (Securities Transaction Tax), and other charges to each transaction amount before calculating average. This gives you the true average cost and helps in accurate profit/loss calculation for tax purposes.
How to average shares in Zerodha or Groww?
Most trading platforms like Zerodha and Groww automatically calculate your average price in the holdings section. However, you can use our calculator to plan future purchases, calculate what-if scenarios, or verify platform calculations independently.
Can averaging guarantee profits?
No, averaging is a strategy to manage purchase price, not a guarantee of profits. If the stock continues to decline or company fundamentals deteriorate, averaging down can increase losses. Always combine averaging with fundamental analysis and proper risk management.
What is the 50-30-20 rule in averaging?
The 50-30-20 rule suggests investing 50% initially, 30% if price drops 10-15%, and remaining 20% if it drops further. This helps manage risk while averaging down. Adjust percentages based on your risk appetite and conviction in the stock.