I wanted to get my avaerage buy price for some stocks I bought and see if I made money.

So far for just buying and then later selling I have been calculating the avaege buy price using this formula

((stockamount * price) + (stockamount * price)) / (stockamount + stockamount)


so If I buy 10 shares at 2.00 and 5 shares at 3 I would get average buy price of

((10 * 2.00) + (5 * 3.00)) / (10 + 5) = 2.33


This is how I have calculated the average sell price as well.

Recently I have bought some shares, sold them at a higher cost, and then re bought some when they slightly went under what I sold them at.

I have no idea how to figure out my average buy price in this situation because I re bought some. here is sample data bought 10 @ 2.00 sold 7 @ 3.00 bought 2 @ 2.50 I thought maybe doing something like this

((10 * 2.00) - (7 * 3.00) + (2 * 2.50)) / (10 - 7 + 2) = 0.8


It does not make any sense that my average buy was 0.8

Thanks!

I am a Canadian, and under Canadian tax laws, I think there are at least two ways of determining your cost basis for shares. I am not going to get into the details of tax accounting; please see a qualified tax professional for advice.

However, if you just want to track your profit and loss for analysis purposes, the standard way of determining the book value of your positions is to track the average cost. You track the number of shares you own, and their total cost.

Although that might be convenient, it probably would not be acceptable under most accounting conventions (so no textbook will tell you to do it that way). It also would give some strange-looking results. If you made \$1 million profit on some shares, and then sold all but one of those shares, you would have a “cost” of about -\$1 million for that one share. Most people would look at you funny if you showed them that number on a spreadsheet.