Share Average Calculator |Stock Averaging Cost Calculator
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Updated on: September 29, 2024
Share average calculator is an averaging tool to calculate the average price of share having different buying rates. Using this share average calculator, you can calculate the mean price of shares and predict the best time to sell, add more share units or hold stocks for future increments.
Steps For Using Share Average Calculator
Share Average Calculator is a user-friendly tool designed for Stock investors to help assist in performing average calculation.
Step 1: Select the currency in which you want to display the result from the currency dropdown.
Step 2: Input the share quantity.
Step 3: Enter the price per share.
You can add more purchase/Lot by clicking “Add More” button.
Step 4: After inserting into input fields, click on “Calculate” button to output the results. The result will show average price, total shares, each purchase cost, along with other advance comparisions.
Benefits Of Share Average Calculation
The main benefits of cost averaging calculation are in profit analysis. The Down and Up Averaging is concerned primarily with lowering the average price of owned shares so that when the price steps up above the average price, an investor can gain profit. The profit amount depends on how high the price will rise above the average price. The spike in share’s price is unpredictable however using modern tools and data analysis techniques the spike in price can be forecasted. Using share average mathematical analysis, it gives investors an approach either to average down or up.
Average Down strategy involves buying more shares at a lower price. When the shares are bought at higher rates in the past and if the price spikes down at present, buying more shares at lower price helps investors average down their stock value and minimize the possible loss. The more shares you earn at lower price, the lower will be your overall weighted price and risk of loss. Average down calculation can certainly minimize your loss but are uncertain about the profit. If the price step up above the average value at certain duration, then in this case profit will be granted depending on the number of shares you owned and the spike in price above the average price.
While Average Up strategy involves buying more shares even at the higher rates than before. The investment in this strategy is for skilled investors or for those who believes price will spike more and more higher. The average up price in this case goes higher and higher due to the addition of share at higher rate. The profit using this method is only when the price steps up above the final average up price.
Overall, share average calculation is a beneficial mathematical analysis that helps investors manage their portfolio by providing various insights, overviews, data interpretation along with investment optimization strategies.
Share Average Formula
The formula for average calculation in share (stock) is similar to that of mean (average) calculation. It is also called weighted average. The average is calculated by total price divided by total number of shares.
Share Average Formula = Total Price of Share/Total Number of Share
For easier, reliable and error free calculation, software-based calculator (ShareAverageCalculator.com) can be used.
About Share Average Calculator
This calculator is officially powered by ShareAverageCalculator.com. It aims to helps investors in surviving liquidity, maximizing profits and actively managing their portfolios.
FAQs
How is average share price calculated for stocks?
Average share price is calculated by adding all closing price of shares of a particular inventory for a specific period of time and then dividing it with total number of closing days or period. In case of shares bought in various time duration, the average is calculated by sum of all price of shares divided by total number of shares.
How to calculate average stock price after selling?
When a certain portion of shares is sold from the total portfolio, then average stock price after selling is calculated by subtracting the sold price with the total price and then dividing the remaining price with remaining shares to get the average after selling of certain portion. The selling may follow either First in First Out (FIFO) or Last in First Out (LIFO) rule.
How to calculate average share price in Any Country?
Sum the total price and then divide with total number of shares to get average price. If you bought 10 shares at $120, 15 at $125 and 20 at $130 then average will be (10 x 120 + 15 x 125 + 20 x 130) / 45 = $126.11 per share. The process will be same for any country stocks, the only difference will be the currency. For example: Dollar ($) for America or Australia, Euro (€) for Europe, Malaysian Ringgit (RM) for Malaysia, Nepalese rupee (रु) for Nepal and so on.
How to calculate average price per unit?
To calculate weighted (average) price per unit, sum all the buying prices of particular stock (including taxes and commission paid during buying) and divide it with total number of shares.
What is the share average price formula for stocks?
Share average price formula (x̄) = ∑X/N. Where, ∑X is the total sum of prices of share (including all taxes and fee) and N is the total number of shares. For average calculation on the basis of closing price of same share for a particular period, average (x̄) is total closing price divided by total number of days (period). If there is ‘f or n’ number of shares bought in various lot or period, then multiply it with its unit price in every purchased lot, sum all prices in each purchased lots and divide with total number of stocks. The formula in this case will be (x̄)= ∑fX/N.
Is share weighted average price and share average price same?
Yes, weighted and average price are same. These words are synonym to each other. It is only a different way to represent the same value.
References
Mladjenovic, P. (2024). Stock investing for dummies. John Wiley & Sons.
Cagan, M. (2024). Stock Market 101: From Bull and Bear Markets to Dividends, Shares, and Margins—Your Essential Guide to the Stock Market. Simon and Schuster.
Lynch, P., & Rothchild, J. (2000). One up on Wall Street: how to use what you already know to make money in the market. Simon and Schuster.