When a share price falls, how many more shares would bring your average down to your target? The answer depends on your current average price, shares held, new purchase price and target average. The target alone is not enough.
Here is how to calculate the quantity and the extra cash required, using an example that lowers a $100 average to $90.
Start with four numbers
Your current average is the average purchase price of the shares you hold. You also need the number of shares held, the price at which you plan to buy more, and the average you want to reach.
To lower your average to a specific target through another purchase, the prices must satisfy new purchase price < target average < current average. Under those conditions:
Additional shares = shares held × (current average − target average) ÷ (target average − new purchase price)
Example: lowering a $100 average to $90
Suppose you hold 10 shares at an average price of $100 and can buy more at $80. You want to bring your average down to $90. Substituting those four values gives:
10 × (100 − 90) ÷ (90 − 80) = 10 shares
Result for this example
Buy 10 more shares
At $80 each, the additional purchase costs $800. You would hold 20 shares at a $90 average.
Check the result by dividing the total purchase cost by the total number of shares:
($100 × 10 shares + $80 × 10 shares) ÷ 20 shares = $90
The two prices average to $90 here because the quantities are equal. If you buy different quantities, averaging the two prices alone gives the wrong answer.
The button below opens the calculator with this example filled in. Change the four inputs to calculate your own scenario.
Open this example in the calculator →
How does the purchase price change the cash required?
Keep the original 10 shares at $100 and the $90 target. Here is what happens when only the new purchase price changes.
| Buy price | Shares needed | Additional cash |
|---|---|---|
| $70 | 5 | $350 |
| $80 | 10 | $800 |
| $85 | 20 | $1,700 |
| $89 | 100 | $8,900 |
At $80, you need 10 additional shares. At $89, you need 100. As the new purchase price approaches the $90 target, it takes more shares to bring down the average of the original holding.
The target is the same, but the extra cash required rises from $800 to $8,900. Check the additional cost and total shares held, as well as the resulting average.
Can your average reach the new purchase price?
In this example, buying more at $80 cannot bring your average to exactly $80 while you still hold the shares bought at $100. The higher-priced shares keep the overall average above $80.
More shares at $80 bring the average closer to that price, but never equal to or below it. That is why the target must be higher than the new purchase price.
What if the result is a fractional share?
If the answer is 10.4 shares but you can only buy whole shares, you need 11. Buying 10 leaves the average above the target; buying 11 brings it to or below the target.
The calculator’s “Round up to whole shares” option rounds the required quantity up and shows the resulting average. Turn it off if you can buy fractional shares.
Does a lower average reduce the dollar loss?
At an $80 market price, your original 10 shares bought at $100 have a $200 unrealized loss. After you buy 10 more shares at $80, the average falls to $90, but the loss across all 20 shares is still $200.
The percentage loss is smaller because you have invested more money. The dollar loss has not changed at the moment of purchase, and future price moves now affect 20 shares instead of 10. Consider the extra money invested alongside the lower average.
The examples exclude fees and taxes. The calculator checks quantities and cash requirements; it does not determine whether buying more is a good investment or calculate your tax cost basis.