Stock Average Calculator

Mastering the art of "Buying the Dip".

You bought a stock at $100. It dropped to $80. Should you panic? Or should you buy more? This strategy is called Dollar Cost Averaging (DCA) or "averaging down." By buying more shares at a lower price, you lower your average cost per share, making it easier to break even when the stock recovers.

Why Average Down?

Let's say you bought 10 shares at $100. Total cost: $1000. The price drops to $50. If you buy 10 more shares at $50 (Total: $500), you now own 20 shares for a total cost of $1500. New Average Price: $75. Now, the stock only needs to rise to $75 for you to break even, instead of rallying all the way back to $100.

Warning: Falling Knives

Averaging down works great for high-quality companies (like Microsoft) during a panic. It is disastrous for bad companies that are going to zero. Never average down on a losing trade just to avoid admitting a mistake.