Averaging Down Calculator

Averaging down is an investment strategy where you buy additional shares of a stock after its price has fallen, lowering your average cost basis (average purchase price).

Not always. If the stock price keeps falling, your losses can grow larger. It is generally best applied when a stock drops temporarily and the company's fundamentals remain sound.

DCA involves buying shares at regular intervals from the start, regardless of price. Averaging down specifically refers to buying more shares after a price decline in a stock you already hold.

A common approach is to add 50–100% of your current position size. Adding too little has minimal impact on your average price; adding too much concentrates risk in a single stock.

There is no fixed rule, but a common strategy is to average down after a 10–20% drop for the first buy and again after another 10–20% decline for a staged approach.

Avoid averaging down when a company's fundamentals have deteriorated—such as a sharp earnings decline, surging debt, or structural industry changes—or for highly speculative or delisting-risk stocks.

Lowering your average cost also lowers your break-even price. Enter the new average as the buy price in the Stock Profit Calculator to find your exact break-even sell price.