Average Cost Calculator | Crypto, Stocks, Forex – Trading
Average cost calculator is a handy tool for traders and investors.
Whether you are trading Bitcoin, Stocks or Forex. This tool allows you to determine the average entry and the exit price for your trades. It supports up to 10 orders. Just enter the total number of contracts/shares for each buy or sell and input the order price to get the result.
If you are an investor then this tool can be used to calculate the average share price of a stock that you purchased multiple times. This average down calculator will give you the average price for both average down and average up. Simply input the number of shares of each buy and the purchase price of the stock to get the average share price.
When you need this average down calculator?
When you are looking to open a trade with multiple entries or when you want to close down your position using two or more exits. Either way you wish to know the know the average entry price or the exit price beforehand.
Or let’s say you are currently in a losing trade and you wish to buy or sell more contracts to average down your entry so that you can breakeven. It is essential that you determine the average price particularly before adding to your existing position.
BitMEX, Bybit and other crypto derivatives platforms has got tools to calculate the profit / loss and to estimate the liquidation cost beforehand. But they do lack this average down calculator.
So how does the calculation works?
How to calculate the average price?
Let us assume you have placed a buy order of 100,000 Bitcoin contracts at the price of $10,000. Later on you wish to buy 100,000 contracts additionally at the price of $8,000. So the average cost of your 200,000 contracts will be $9000.
Here is the formula to calculate the average price.
Average cost formula:
To calculate the average price you need to know the total contracts / shares quantity and the purchase price of each contract / share.
1. Total number of contracts / shares bought = 1st contract amount + 2nd contract amount + 3rd contract amount + …
Example: 100,000 + 100,000 = 200,000 contracts
2. Total amount bought = (1st contract amount * its purchased price) + (2nd contract amount * its purchased price) + (3rd contract amount * its purchased price) + …
Example: (100,000 x $10,000) + (100,000 x $8,000) = 1,000,000,000 + 800,000,000 = 1,800,000,000
Average price = Total amount / Total contracts
Example: 1,800,000,000 / 200,000 = $9,000
By using this average price calculator tool you don’t need any Excel sheet or you don’t have to go through any tedious process of calculating numbers manually. Just enter the contract quantity and its purchase price. The tool will do the rest.
This tool is not only for cryptocurrency traders but it also applies to stock trading and Forex.