About This Calculator
The Averaging Calculator determines your new average purchase price after buying additional shares or contracts at a different price — a technique called averaging. When investors buy more shares as the price falls (averaging down) or as it rises (averaging up), their cost basis changes and this calculator shows exactly what the new average is, along with total capital deployed and unrealised P&L. Averaging is one of the most commonly used and most misunderstood strategies in NSE equity investing. Averaging down — buying more shares as a stock falls — can reduce your average price and lower the breakeven level, but it simultaneously increases your total exposure to a falling position. This strategy is appropriate only for fundamentally strong long-term stocks where the investor has conviction in the business, not for speculative trades or F&O positions. Averaging up — adding to a position as the price rises — is the approach used by professional momentum traders and fund managers. It adds capital to winning positions rather than losing ones, which is mathematically superior in trending markets.
