How many shares do you need to reach a target average price?

You own 10 shares at an average price of $100, and the price has fallen to $80. Buying another 10 shares at $80 brings your average down to $90. That purchase requires another $800.

($100 × 10 shares + $80 × 10 shares) ÷ 20 shares = $90

Your average is the total purchase cost divided by the total number of shares. The two prices happen to average to $90 here because the quantities are equal. If you buy different quantities, averaging the two prices alone gives the wrong answer.

How many shares would reach your target?

If you know the average you want to reach, work backward to find the additional quantity:

Additional shares = shares held × (current average − target average) ÷ (target average − new purchase price)

For this example, 10 × (100 − 90) ÷ (90 − 80) = 10 shares. In the calculator, choose “Target average” and enter your current average, shares held, new purchase price and target average.

Calculate the shares you would need →

A small price difference can require much more cash

Keep the original 10 shares at $100 and the $90 target. Here is what happens when only the new purchase price changes.

At $80, you need 10 additional shares. At $89, you need 100. That $89 purchase price is only $1 below the target, so it takes far more shares to bring down the average of the original holding.

Both purchases produce a $90 average, but one costs $800 and the other costs $8,900. Check the additional cash and total shares held, as well as the new average.

Can buying at $80 bring your average all the way to $80?

Not while you still hold the shares bought at $100. Every additional share at $80 brings the average closer to $80, but the higher-priced shares keep it above that level.

Under these conditions, a lower target average must fall between $80 and $100. A target below the purchase price, such as $75, cannot be reached by buying at $80 either.

If the answer is 10.4 shares but you can only buy whole shares, you would need 11 to reach or go below the target average. If fractional shares are available, turn off “Round up to whole shares” in the calculator.

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.

The examples exclude fees and taxes. Use the calculation to check quantities and cash requirements; it does not determine whether buying more is a good investment or calculate your tax cost basis.