1. What is Average Stock Price?

The average stock price represents the mean cost basis of shares purchased at different prices. It's calculated by dividing the total amount invested by the total number of shares owned.

2. How Does the Calculator Work?

The calculator uses the average price formula:

Where:

• Total Cost — Sum of all purchases (in your chosen currency)
• Shares Purchased — Total number of shares acquired

Explanation: This calculation helps investors understand their true cost basis when they've purchased shares at different prices over time.

3. Importance of Average Price Calculation

Details: Knowing your average price is crucial for determining when to sell for profit, calculating capital gains taxes, and evaluating investment performance.

4. Using the Calculator

Tips: Enter the total amount spent on stock purchases (including commissions if applicable) and the total number of shares acquired. Select your currency for accurate results.

5. Frequently Asked Questions (FAQ)

Q1: Should I include trading commissions in total cost?
A: Yes, for accurate average price calculation, include all costs associated with purchasing the shares.

Q2: How does this differ from dollar-cost averaging?
A: Dollar-cost averaging is the strategy of investing fixed amounts at regular intervals, while average price is the mathematical result of those purchases.

Q3: What if I've sold some shares?
A: This calculator gives your current average price for shares you still own. For tax purposes, you may need to track lots separately.

Q4: How precise should the calculation be?
A: For most stocks, rounding to 4 decimal places is sufficient. For very high-priced stocks, you may need more precision.

Q5: Does this work for fractional shares?
A: Yes, the calculator handles fractional share quantities accurately.