1. What is Share Average Price?

The Share Average Price is a weighted average calculation that determines the average cost per share when purchasing stocks at different prices and quantities. It helps investors track their investment performance and make informed decisions.

2. How Does the Calculator Work?

The calculator uses the weighted average formula:

Where:

• \( \text{Price}_i \) — Purchase price for each transaction (currency)
• \( \text{Shares}_i \) — Number of shares purchased in each transaction
• \( \text{Total Shares} \) — Sum of all shares purchased

Explanation: This formula calculates the true average cost per share by weighting each purchase price by the number of shares bought at that price.

3. Importance of Average Price Calculation

Details: Knowing your average share price is essential for determining breakeven points, calculating profits/losses, and making strategic investment decisions about when to buy more shares or sell existing positions.

4. Using the Calculator

Tips: Enter the price and number of shares for each purchase transaction. Prices should be in your local currency, and shares should be whole numbers. All values must be non-negative, and total shares must be greater than zero.

5. Frequently Asked Questions (FAQ)

Q1: Why use weighted average instead of simple average?
A: Weighted average accounts for the different quantities purchased at each price, giving a more accurate representation of your true average cost.

Q2: Can I calculate for more than two transactions?
A: This calculator handles two transactions. For more transactions, you would need to sum all (price × shares) products and divide by total shares.

Q3: Does this include brokerage fees?
A: No, this calculates only the share price average. For total cost including fees, you would need to add brokerage costs to the total investment amount.

Q4: How often should I recalculate my average price?
A: Recalculate after every purchase to maintain an accurate average cost basis for your investment portfolio.

Q5: Is this useful for dollar-cost averaging strategies?
A: Yes, this calculator is particularly valuable for investors using dollar-cost averaging to track their average purchase price over time.