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Average Price Formula:
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Average Price Per Share, also known as cost basis average, is the average price you've paid for each share of a stock or investment. It's calculated by dividing the total cost of your investment by the total number of shares owned.
The calculator uses the average price formula:
Where:
Explanation: This calculation helps investors determine their average purchase price across multiple transactions, which is essential for tracking investment performance and calculating capital gains or losses.
Details: Knowing your average price per share is crucial for making informed investment decisions, determining when to buy more shares, setting sell targets, and calculating tax implications of selling investments.
Tips: Enter the total amount you've invested in any currency and the total number of shares you own. The calculator will instantly compute your average price per share. All values must be positive numbers.
Q1: Why is average price per share important?
A: It helps you understand your investment's break-even point, track performance against current market price, and make informed decisions about buying more or selling shares.
Q2: How does dollar-cost averaging affect average price?
A: Dollar-cost averaging involves investing fixed amounts regularly, which typically results in a favorable average price over time as you buy more shares when prices are low and fewer when prices are high.
Q3: Should I include trading fees in total cost?
A: Yes, for accurate cost basis calculation, include all commissions and fees paid to acquire the shares in your total cost.
Q4: How is this different from weighted average?
A: This is essentially a weighted average calculation where each share contributes equally to the total, making it perfect for multiple purchases at different prices.
Q5: Can I use this for cryptocurrency?
A: Yes, this calculator works for any asset where you want to calculate your average purchase price, including stocks, ETFs, mutual funds, and cryptocurrencies.