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Calculate Average Stock Price

Weighted Average Formula:

\[ \text{Avg} = \frac{\sum (\text{Price} \times \text{Quantity})}{\text{Total Quantity}} \]

USD/share
shares
USD/share
shares

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1. What is Weighted Average Stock Price?

The weighted average stock price calculates the average price paid for shares by accounting for different purchase prices and quantities. This gives investors a more accurate cost basis than a simple average.

2. How Does the Calculator Work?

The calculator uses the weighted average formula:

\[ \text{Avg} = \frac{\sum (\text{Price} \times \text{Quantity})}{\text{Total Quantity}} \]

Where:

Explanation: The formula weights each purchase price by the number of shares bought at that price, giving more influence to larger purchases.

3. Importance of Average Price Calculation

Details: Knowing your average cost per share is essential for determining profit/loss, making sell decisions, and tax reporting. It helps investors track performance across multiple purchases.

4. Using the Calculator

Tips: Enter at least one price and quantity pair. You can add up to two purchase transactions. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Why use weighted average instead of simple average?
A: Weighted average accounts for different purchase amounts, giving a more accurate cost basis that reflects your actual investment.

Q2: How many transactions can I calculate?
A: This calculator handles two transactions. For more complex portfolios, consider using spreadsheet software.

Q3: Does this include fees and commissions?
A: No, this calculates the share price average only. For true cost basis, you would need to factor in trading costs.

Q4: Can I use this for crypto investments?
A: Yes, the same principle applies to any asset purchased in multiple transactions at different prices.

Q5: How does this help with tax reporting?
A: Your average cost basis is needed to calculate capital gains when selling portions of your holdings.

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