Finance Calculators
Average down calculator
See exactly what your new average cost per share becomes when you buy the dip. Enter your current position and new purchase — the math is done instantly.
Current position
New purchase
Your new average cost per share
$226.67
Down from $250.00 — average reduced by $23.33
Total shares
15
was 10
Total invested
$3,400.00
was $2,500.00
New shares bought
5
for $900.00
Break-even progress
How much closer the current price gets you to breaking even
How averaging down works
When a stock or crypto asset drops below your purchase price, buying more shares at the lower price reduces your average cost per share. This is called averaging down or dollar cost averaging into a position.
For example, if you own 10 shares bought at $250 each ($2,500 invested) and the price drops to $180, you could buy 5 more shares for $900. Your new position is:
New Average = ($2,500 + $900) ÷ (10 + 5)
New Average = $3,400 ÷ 15 = $226.67
Your break-even price dropped from $250 to $226.67 — the stock now only needs to recover to $226.67 instead of $250 for you to break even. But you've also invested an additional $900, so your total risk has increased.
When averaging down makes sense
- Your original thesis is still valid. If the price dropped because of a temporary panic (market-wide sell-off, earnings miss that will recover), averaging down can reduce your cost basis before the rebound.
- The asset is fundamentally sound. Blue-chip stocks, major ETFs, and established cryptocurrencies are more likely to recover than speculative penny stocks.
- You have a long time horizon. Averaging down works best when you can hold through the recovery. If you might need the money soon, adding more risk is dangerous.
Frequently asked questions
- What does averaging down mean?
- Averaging down means buying more of a stock or crypto asset after its price has dropped, which lowers your weighted average cost per share. If you bought 10 shares at $250 and buy 5 more at $180, your new average is ($2,500 + $900) / 15 = $226.67.
- How do I calculate my new average cost?
- New Average = (Current Shares × Current Average + New Shares × New Price) ÷ (Current Shares + New Shares). Or if you know the dollar amount: New Average = (Total Dollars Invested) ÷ (Total Shares Owned).
- Is averaging down a good strategy?
- Averaging down reduces your break-even price, but it also means investing more money into a position that has already declined. It works well when the asset recovers, but increases your losses if it continues to fall. Always consider whether your original thesis is still valid before buying more.
- Can I use this for crypto like Bitcoin and Ethereum?
- Yes. The math is identical for crypto. Enter your current holdings, your average cost, and the new purchase price. The calculator works for any asset — stocks, ETFs, crypto, or tokens.
- What's the difference between buying by shares vs. buying by dollars?
- Buying by shares means you specify exactly how many units you want (e.g., 5 more shares). Buying by dollars means you specify how much money you want to invest (e.g., $1,000) and the calculator figures out how many shares that buys at the new price. Both produce the same average — they're just different ways to think about the purchase.
- Is this calculator free?
- Yes, completely free. All calculations happen in your browser — no data is sent to any server, and no account is needed.