Average Entry Price Calculator
Bought in several parts? Add each entry with its price and quantity and get the true weighted average price and the total position.
Average Entry
Adds the open profit or loss on the whole position.
Average entry price
$11.3333
300 units in total
The whole position cost $3,400.00 for 300 units, so each unit cost $11.3333 on average. The plain average of the prices ($11) is different because more was bought at some prices than others.
Buying more as price falls lowers the average, but it also makes the position bigger. The risk grows with it: averaging down is not the same as reducing risk.
How was this calculated?
- Entry 1: 100 × $10 = $1,000.00
- Entry 2: 200 × $12 = $2,400.00
- Total cost = $3,400.00; total quantity = 300
- Average entry = $3,400.00 ÷ 300 = $11.3333
What does this mean?
When a position is built in stages, the average entry is not the simple mean of the prices. A larger purchase has a larger pull on the average, so each price has to be weighted by the quantity bought at it.
Knowing the true average matters because it is the break-even point of the whole position: price has to get back to it before the trade is profitable.
The formula
Total cost = Σ (price × quantity)
Total quantity = Σ quantity
Average entry = Total cost ÷ Total quantity
Worked example
100 shares bought at £10, then 200 shares at £12. Total cost = £1,000 + £2,400 = £3,400 for 300 shares. The average entry is £3,400 ÷ 300 = £11.33, not £11, because twice as many shares were bought at the higher price.
Frequently asked questions
How is average entry price calculated?
Multiply each price by its quantity, add the results to get the total cost, then divide by the total quantity. This is a weighted average.
Why is the average not just the mean of the prices?
Because the quantities differ. Buying more at one price moves the average toward that price. A plain mean treats every purchase as if it were the same size.
What is averaging down?
Buying more of a position as its price falls, which lowers the average entry. It also increases the size of the position and the total amount at risk, so it is not the same as reducing risk.
Does this work for short positions?
Yes. The average entry is calculated the same way. Adding a current price and choosing Short shows the open profit or loss with the direction reversed.
Learn more
This tool is for education and general information only and is not financial advice. Results are estimates that exclude spreads, commissions, swaps and slippage. Trading carries a risk of loss. Preferences you choose, such as your account currency, are remembered only in your own browser.