Calculate your new average cost per share when buying more stock. Plan your entries with scaling tables and find your break-even price instantly.
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View PlansAveraging down is an investment strategy where you purchase additional shares of a stock you already own after its price has dropped below your original purchase price. By buying more shares at a lower price, you effectively reduce your overall average cost per share, also known as your cost basis. This means the stock does not need to recover all the way back to your original buy price for you to break even or turn a profit. Many long-term investors use averaging down as a way to accumulate more shares of companies they believe in at a discount, turning short-term price weakness into a potential long-term advantage.
There is no universal condition that makes averaging down appropriate. Before adding, reassess revenue, cash flow, estimates, valuation, competition, concentration, and why the thesis could be wrong. A broad-market decline or apparently solid fundamentals do not prove a dip is temporary, and a long horizon does not ensure recovery. The calculator shows cost-basis math, not whether adding capital is suitable.
Using this average down calculator is simple and takes just a few seconds. Start by entering the number of shares you currently own and your current average cost per share in the "Your Current Position" section. Then, select a purchase mode: you can choose to buy with a specific dollar amount, buy a set number of shares, target a desired average price, or view a full scaling table. Enter the price at which you plan to buy additional shares and click "Calculate" to instantly see your new average cost, total shares, total investment, and break-even price. The scaling table mode is especially useful for planning multiple entry points, showing you exactly how different investment amounts will impact your average cost at a given buy price.
Let's walk through a concrete example to see how averaging down works in practice. Suppose you purchased 100 shares of a stock at $50 per share, giving you a total investment of $5,000. The stock then drops to $40, and you decide to buy 50 more shares at that lower price, investing an additional $2,000. Your total investment is now $7,000 across 150 shares, which gives you a new average cost of $46.67 per share ($7,000 / 150 = $46.67). Instead of needing the stock to recover all the way back to $50 to break even, you now only need it to reach $46.67. That is a 6.7% reduction in your break-even price, achieved by strategically adding shares at a lower level.
Averaging down can increase total loss and concentration if price continues falling or value is permanently impaired. Risk limits and a maximum position size can define intended exposure, but stop orders may execute below their trigger and no exit plan ensures success. Reassess financial health and contrary evidence before each additional purchase.