How to Use This Calculator
- 1
Enter your share transactions
For each stock purchase, enter the number of shares bought and the price paid per share. Click 'Add' to include additional transactions.
- 2
Review your weighted average and insights
Click Calculate to see your weighted average price, total shares, total cost basis, and price range. The Insights card breaks down your cost distribution and breakeven point.
Example Calculation
An investor bought 100 shares at $50.00 and later bought 50 more shares at $60.00.
Transaction 1 Shares
100
Transaction 1 Price
$50.00
Transaction 2 Shares
50
Transaction 2 Price
$60.00
Results
Weighted Avg Price
$53.3333
Total Shares
150
Total Cost Basis
$8,000.00
Price Range
$10.00
Tips
Include All Purchases
Record every transaction including dividend reinvestments and fractional shares. Missing even one lot can skew your weighted average and lead to incorrect tax calculations.
Use for Tax-Loss Harvesting
Compare your weighted average cost basis to the current market price. If the stock trades below your $53.33 average, you may be able to harvest a capital loss to offset gains elsewhere in your portfolio.
Monitor Averaging Down Effectiveness
When buying dips, re-run the calculator after each purchase. For example, buying 200 shares at $100 then 200 more at $80 drops your average to $90.00 -- a $10.00 reduction that makes breakeven 10% easier to reach.
Compare Cost Basis Methods
The weighted average method shown here is one of several IRS-approved approaches. FIFO and specific identification may yield different tax outcomes. Consult a tax advisor to choose the best method for your situation in 2026.
How to Calculate Your Weighted Average Share Price
The weighted average share price tells you the true blended cost of your entire stock position.
Unlike a simple average, it accounts for how many shares you bought at each price, giving an accurate cost basis for tax reporting and performance tracking in 2026.
The formula is straightforward:
Weighted Avg Price = Total Cost Basis / Total Shares
Where:
Total Cost Basis = (Shares_1 x Price_1) + (Shares_2 x Price_2) + ...
Total Shares = Shares_1 + Shares_2 + ...
For example, buying 100 shares at $50.00 and 50 shares at $60.00 gives a total cost of $8,000.00 across 150 shares, resulting in a weighted average of $53.3333 per share.
Worked Example: Two-Lot Purchase
Consider an investor who makes two purchases of the same stock:
| Detail | Transaction 1 | Transaction 2 | Combined |
|---|---|---|---|
| Shares | 100 | 50 | 150 |
| Price per Share | $50.00 | $60.00 | $53.33 (weighted) |
| Cost | $5,000.00 | $3,000.00 | $8,000.00 |
| % of Total Cost | 62.5% | 37.5% | 100% |
The weighted average ($53.33) sits closer to $50.00 than $60.00 because the larger lot was purchased at the lower price.
This is why the weighted method is more accurate than a simple average of $55.00 for determining your true cost basis.
Cost Basis Methods Compared
The weighted average method is one of several IRS-approved approaches for calculating your cost basis.
Each method can produce different taxable gains:
- Weighted Average: Blends all purchases into one cost per share. Simplest for ongoing DCA (dollar-cost averaging) investors and the default for many mutual fund accounts.
- FIFO (First-In, First-Out): Assumes the oldest shares are sold first. In a rising market, this typically produces higher capital gains because your cheapest shares are sold first.
- Specific Identification: Lets you choose which exact lot to sell. Useful for tax optimization -- you can sell your highest-cost lot to minimize gains or your lowest-cost lot to realize gains in a low-income year.
Choosing the right method depends on your tax bracket, holding period, and investment strategy.
The weighted average method works well for investors who make frequent, similarly-sized purchases over time.
Averaging Down and Position Management
Averaging down is a strategy where you buy more shares after a price decline to lower your overall cost basis.
If you hold 200 shares at $100.00 and the stock drops to $80.00, buying another 200 shares brings your weighted average down to $90.00 -- making breakeven $10.00 per share easier to reach.
However, averaging down increases your total exposure.
Your total cost rises from $20,000.00 to $36,000.00, and you now hold 400 shares of a declining stock.
Only average down when your investment thesis remains intact and you can afford the additional risk.
Frequently Asked Questions
What is the weighted average share price?
The weighted average share price is the blended cost per share across all your purchases, weighted by the number of shares bought at each price. It equals your total cost basis divided by your total shares. For example, buying 100 shares at $50.00 and 50 shares at $60.00 gives a weighted average of $53.3333 -- not the simple average of $55.00 -- because more shares were purchased at the lower price.
How is this different from a simple average of my purchase prices?
A simple average treats each transaction equally regardless of size. The weighted average accounts for the quantity purchased at each price. If you bought 100 shares at $50.00 and 50 shares at $60.00, the simple average is $55.00 but the weighted average is $53.33. The weighted method is more accurate because it reflects that two-thirds of your shares were bought at the lower price.
Does selling shares change my weighted average cost basis?
Under the average cost method, selling shares removes them at the current weighted average price, so the per-share cost basis for remaining shares stays the same. However, under FIFO or specific identification methods, selling particular lots can change your effective average. The method you choose affects both your remaining cost basis and your taxable gain or loss.
Can I use this calculator for mutual funds and ETFs?
Yes. Mutual funds often default to the average cost method for tax reporting. Enter each purchase lot -- including automatic reinvestments -- with its share count and price. The calculator computes the same weighted average your brokerage would report on your 1099 form.
How does averaging down reduce my cost basis?
Averaging down means buying additional shares after a price decline. For instance, if you own 200 shares at $100.00 and buy 200 more at $80.00, your weighted average drops from $100.00 to $90.00. The stock now only needs to reach $90.00 -- instead of $100.00 -- for you to break even, which is a 10% lower threshold.
What happens when I add a new purchase at a higher price?
Buying shares above your current weighted average will raise your overall cost basis. For example, if your average is $53.33 on 150 shares and you buy 100 more at $70.00, your new weighted average rises to approximately $60.00. This is called averaging up and is common when adding to a winning position with continued conviction.