1. What is the Average Price?

The Average Price represents the cost basis per share when purchasing stocks 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 simple equation:

Where:

• \( \text{Total Cost} \) — Sum of all purchases (USD)
• \( \text{Shares} \) — Total number of shares owned (units)

Explanation: This calculation helps investors understand their break-even price point when they've purchased shares at different prices over time.

3. Importance of Average Price Calculation

Details: Knowing your average price is essential for determining when your investment becomes profitable and for making informed decisions about buying more shares or selling.

4. Using the Calculator

Tips: Enter the total amount you've spent on purchasing the stock (in USD) and the total number of shares you own. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Does this include brokerage fees?
A: For most accurate results, your total cost should include all commissions and fees associated with purchasing the shares.

Q2: How does this differ from weighted average?
A: This is a simple average. For multiple purchases at different prices, you should sum all purchase amounts and all shares.

Q3: What if I've sold some shares?
A: This calculator assumes you're calculating the average for your current holdings. For sold shares, you may need to adjust your cost basis.

Q4: Can I use this for fractional shares?
A: Yes, the calculator works with fractional share amounts.

Q5: How often should I recalculate?
A: Recalculate whenever you make additional purchases to maintain an accurate average price.