How to calculate average stock price

Investing in stocks can be a great way to make your money yield. However, it is important to understand how to calculate the average price of your actions to make more informed decisions about your investments. In this article, we will explain step by step how to make this calculation.

What is average stock price?

The average price of stock is the average amount paid for each action in a given period of time. This calculation is important to monitor the performance of your investments and make strategic decisions.

Step by step to calculate the average price of stock

To calculate the average price of your actions, follow the following steps:

1. Write down all stock purchases you did, including the amount of shares purchased and the price paid for each action.
2. Add the total amount spent on all stock purchases.
3. Add the total amount of shares purchased.
4. Divide the total amount spent by the total number of shares purchased.

The result of this calculation will be the average price of your actions.

Practical Example

Let’s suppose you bought 100 shares from a particular company for $ 10 each. On another occasion, you bought 50 more shares from the same company for $ 12 each. To calculate the average price of your actions, follow the steps:

1. Total amount spent on the first purchase: 100 x $ 10 = $ 1000
2. Total amount spent on the second purchase: 50 x $ 12 = $ 600
3. Total amount of shares purchased: 100 + 50 = 150
4. Total amount spent on all purchases: $ 1000 + $ 600 = $ 1600
5. Average price of your shares: R $ 1600 /150 = R $ 10.67

Therefore, the average price of your shares is $ 10.67.

FINAL CONSIDERATIONS

Calculating the average price of stocks is critical to monitor the performance of your investments and make more informed decisions. Remember to always write down all stock purchases you make and regularly update the average price calculation.

We hope this article has been useful for you to understand how to calculate the average price of stocks. If you have any questions, leave a comment below.