Weighted Average Stock Price Formula

Finance Formula • Published on July 30, 2026 • Last updated July 30, 2026

Mathematical Equation

$$\text{Average Price} = \frac{\sum (\text{Shares}_i \times \text{Price}_i)}{\sum \text{Shares}_i}$$

Variable Definitions

Shares_i

Quantity of shares purchased in buy order i

Price_i

Purchase price per share in buy order i

Detailed Explanation

In-Depth Guide

Weighted average stock price calculates the true cost basis per share when an investor buys a security across multiple buy transactions at varying market prices.

How to Calculate: Step-by-Step

1. Multiply the number of shares bought in each trade by its purchase price to get trade cost. 2. Sum total invested capital across all trades. 3. Sum total number of shares accumulated. 4. Divide total invested capital by total share count.

Worked Calculation Example

Trade 1: 100 shares @ $50 ($5,000). Trade 2: 50 shares @ $40 ($2,000): - Total Capital Invested = $7,000. - Total Shares = 150. - Average Price = $7,000 / 150 = $46.67 per share.

Common Use Cases

  • Averaging down in stock market dips
  • Portfolio cost basis accounting
  • Crypto position price tracking

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