1. What Is Average Share Price?

The average share price represents the weighted average cost per share when purchasing stocks at different prices over time. It helps investors track their cost basis and evaluate investment performance.

2. How Does The Calculator Work?

The calculator uses the weighted average formula:

Where:

• \( \text{Total Cost} \) — Sum of all purchase costs (currency)
• \( \text{Total Shares} \) — Total number of shares owned (shares)
• \( \text{Avg Price} \) — Weighted average price per share (currency/share)

Explanation: This calculation accounts for multiple purchases at different prices, giving you the true average cost per share across all transactions.

3. Importance Of Average Price Calculation

Details: Knowing your average share price is essential for determining profit/loss, making informed selling decisions, tax calculations, and portfolio management strategies.

4. Using The Calculator

Tips: Enter total investment cost in your local currency and total number of shares purchased. Both values must be positive numbers greater than zero.

5. Frequently Asked Questions (FAQ)

Q1: Why Calculate Average Share Price?
A: It helps investors understand their true cost basis, determine break-even points, and make informed decisions about when to buy more or sell shares.

Q2: How Is This Different From Simple Average?
A: This is a weighted average that accounts for different purchase amounts at different prices, unlike a simple average that treats all purchases equally.

Q3: Should I Include Brokerage Fees?
A: Yes, for accurate cost basis calculation, include all transaction costs, brokerage fees, and commissions in your total cost.

Q4: Can I Use This For Multiple Purchases?
A: Yes, simply sum all your purchase costs and total shares across multiple transactions to get your overall average price.

Q5: How Often Should I Recalculate?
A: Recalculate after each new purchase to maintain an accurate understanding of your current average cost per share.