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  5. Average Buy Price Calculator: Weighted Cost Basis & DCA

Frequently Asked Questions

  • It uses a weighted average: total invested divided by total quantity purchased. Larger buys affect the average more than smaller ones.
  • Not always. This tool is a planning shortcut for your blended entry price. For tax reporting, the IRS says stock basis often depends on specific identification or FIFO, while average basis is mainly allowed for certain mutual fund and DRIP shares. See the IRS stock basis FAQ.
  • Usually yes. The IRS explains that stock basis generally includes purchase price plus commissions and transfer fees. If you want a stricter basis estimate, add those costs outside this simplified model. See IRS Topic 703.
  • Unrealized profit or loss = current value minus total invested. It shows where the position stands now, before any sale.
  • Yes, for planning. It works well for dollar-cost averaging because each new purchase updates the weighted entry. Investor.gov explains the idea behind dollar-cost averaging.

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Stock Investor

Average Buy Price Calculator

Weighted Cost Basis & DCA

Inputs

Asset Details

$

Purchase History

Purchase #1

$

Purchase #2

$

Purchase #3

$

Results

Average Buy Price

$55,714.29

Unrealized P&L: +$32,500.00 (+16.67%)

Invested vs Current Value

$195,000.00
$227,500.00
Invested
Current Value
Total Purchases
3
Total Quantity
3.5
Total Invested
$195,000.00
Average Buy Price
$55,714.29
Current Price
$65,000.00
Current Value
$227,500.00
Unrealized P&L
+$32,500.00
P&L %
+16.67%
Cost Basis Guide

Average Entry Price Is A Planning Metric, Not Always A Tax Method

Average buy price is useful when you keep adding to the same position and want one clean entry number. It is especially helpful for recurring buys and dollar-cost averaging, but tax reporting rules can be stricter than a simple weighted average.

Summary

Use this calculator to understand your blended entry and live P&L. Use broker records and tax rules when you need an official basis method.

Track Your Real Basis

The IRS says basis generally starts with what you paid and can include commissions and transfer fees. That matters if you want the number to match realized gain reporting. See IRS Topic 703.

Know The Share-Lot Rule

For ordinary stocks bought at different times, you may need specific identification or FIFO instead of a simple average. The IRS stock basis FAQ explains the distinction.

Use Current Price Separately

Current price does not change your average cost. It only changes unrealized profit or loss. Keep those two ideas separate when evaluating whether to add, trim, or hold.