How it works
Average cost = total amount invested ÷ total shares. Buying 100 shares at 10,000 and 100 shares at 8,000 gives (1,000,000 + 800,000) ÷ 200 = 9,000.
Shares needed for a target average
Additional shares = current shares × (current average − target average) ÷ (target average − new buy price). The target must be above the new buy price and below your current average.
Before averaging down
A lower average does not help if the reason for the decline persists — it only enlarges the position. Set a maximum position size first. Fees and taxes are not included.