| Number of Stocks | Purchase Price | Total |
|---|---|---|
How to calculate average price of share?
When we start to invest in the stock market, one of the data that we are interested in learning to calculate is the average price at which we have bought the shares of that company, adding and including within this average price the commissions that we have been charged for the purchases. This way we can analyze when we begin to obtain real returns on that investment.
Many times, the investor buys shares of the same company for a certain time, at different prices; This strategy allows risk diversification over time, a very feasible prudent measure for investors who are beginning to immerse themselves in the world of finance.
How stock average price calculator works ?
A stock average buying price calculator is a tool that allows you to calculate the average price at which you bought a particular stock. This can be useful for tracking your overall performance as an investor, or for determining the cost basis of your stock for tax purposes.
To use a stock average buying price calculator, you typically need to enter the following information:
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The stock ticker symbol: This is the unique identifier for the stock, such as "AAPL" for Apple or "GOOG" for Google.
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The number of shares: This is the number of shares of the stock that you have purchased.
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The purchase price and date of each transaction: You will need to enter the price at which you bought each share, as well as the date of the transaction.
Once you have entered this information, the stock average buying price calculator will calculate the average price at which you bought the stock. This can be useful for determining the overall cost of your investment in the stock and for tracking your performance over time.
Note that if you have sold any shares of the stock, you may also need to account for any capital gains or losses when calculating your average buying price. Consult with a financial advisor or tax professional for more information on how to properly calculate and report capital gains on your stock investments.
Steps to calculate the average price of shares
To calculate the average price of the shares acquired, we must especially take into account the commissions we pay in our broker:
We will add all the purchases of shares of the company ( including the commissions that the broker has charged us ) and we will divide the result by the number of shares we own in the company.
Let's take an example:
Suppose we make purchases of XYZ shares :
- 500 shares at 4 usd
- 700 shares at 5 usd
- 300 shares at 6 usd
- 500 shares at 4 usd: (500 x 4) + 10 = 2,010 usd
- 700 shares at 5 usd: (700 x 5) + 10 = 3,510 usd
- 300 shares at 6 usd: (300 x 6) + 10 = 1,810 usd
In total, we have paid 7,330 usd between the three purchases (2,010 + 3,510 + 1,810) for 1,500 shares , which means that its average purchase price is 4,886 euros (7,330 / 1,500).
To reduce the cost of these operations and begin to obtain a higher return on our investments, you can choose to analyze the commissions of your broker and investigate if there are cheaper brokers with which to operate .