How to Calculate Your Average Stock Buy Price

How do you calculate your average stock buy price? Multiply each purchase’s quantity by its price, add those up, then divide by your total number of shares. If you bought 50 shares at ₹200 and another 50 at ₹150, your average price is (50×200 + 50×150) ÷ 100 = ₹175 per share — not simply the midpoint of ₹200 and ₹150, which is a common mistake.

Why isn’t it just the midpoint of your two prices?

Because quantity matters, not just price. If your second purchase had been 150 shares at ₹150 instead of 50, your average would shift toward ₹150 — (50×200 + 150×150) ÷ 200 = ₹162.50 — since the larger, cheaper lot pulls the weighted average down more. This is why it’s called a weighted average: each purchase counts in proportion to how many shares it represents, not treated equally regardless of size.

A worked example with three purchases

Say you bought a stock three times:

• 100 shares at ₹300 = ₹30,000
• 50 shares at ₹250 = ₹12,500
• 150 shares at ₹200 = ₹30,000

Total invested: ₹72,500. Total shares: 300. Average price = ₹72,500 ÷ 300 = ₹241.67 per share. This is the number you compare against the current market price to know your real unrealized gain or loss — not any single purchase price.

Why do investors average down?

“Averaging down” — buying more of a stock after it’s fallen — lowers your average buy price, which lowers the price the stock needs to recover to for you to break even. It’s a legitimate strategy when you still believe in the stock’s fundamentals, but it’s also how investors sometimes throw good money after bad on a genuinely declining company — averaging down doesn’t change whether the stock recovers, it only changes your breakeven point if it does. Our Stock Average Calculator handles the math for two purchases at once; for more than two, run it again using your running average as the first lot.