How Average Cost Works

1. 1

   Add Up What You Paid

   Multiply the shares by the price for each buy, then add them together. 100 shares at ৳50 and 100 at ৳60 cost ৳11,000 in total.

2. 2

   Divide by Total Shares

   Total paid ÷ total shares. ৳11,000 ÷ 200 shares is ৳55 per share. This is a weighted average, not the simple average of the two prices.

3. 3

   Compare With the Price

   Profit or loss = (price − average cost) × shares. At ৳65 you are up ৳10 on each of your 200 shares: ৳2,000, before charges.

Example: 100 shares at ৳50 and 100 shares at ৳60 give an average cost of ৳55. At ৳65, 200 shares are worth ৳13,000 against ৳11,000 paid, a profit of ৳2,000 or about 18.18%.

Profit and Loss Questions

How do I calculate the average cost of my shares?

Add up the total you paid for all your buys, then divide by the total number of shares. This is a weighted average, so a larger buy counts for more than a smaller one.

Why is my average cost not the simple average of my buy prices?

Because the number of shares matters. If you bought 100 shares at ৳50 and 300 shares at ৳60, your average cost is ৳57.50, not ৳55.

What price do I need to break even?

Your average cost per share. If the price is above it you are in profit, and below it you are at a loss. Trading fees and charges raise the real break-even price a little.

Does my average cost change when I sell some shares?

No. This calculator uses the average cost method, so the shares you keep still have the same average cost. Only buying more shares changes it.

How do bonus shares change my average cost?

Bonus shares add to your share count without adding to what you paid, so your average cost per share falls. Add them as a buy at ৳0 to see it.

Does the result include fees, charges or tax?

No. The figures are before trading fees and any charges or taxes, which reduce your real profit. Your Portfolio and statements show the official figures.

Are dividends included in my profit?

No. Cash dividends are separate from the share price. Use the Dividend Calculator to see your cash dividend after tax.

Quick Glossary

Average Cost

The total you paid divided by the number of shares you bought.

Break-Even Price

The price at which you neither gain nor lose. It equals your average cost, before charges.

Realised Profit or Loss

The gain or loss on shares you have already sold.

Unrealised Profit or Loss

The gain or loss on shares you still hold, at today’s price. It changes as the price moves.

Weighted Average

An average where bigger amounts count for more, so a larger buy moves your average cost more.