1. What Is Average Price Calculator?

The Average Price Calculator helps investors calculate the average purchase price of their stock holdings, particularly useful for Zerodha trading platform users. It determines the cost basis per share across multiple purchases.

2. How Does The Calculator Work?

The calculator uses the simple average price formula:

Where:

• \( Total\ Cost \) — Sum of all purchase amounts including brokerage and taxes
• \( Total\ Shares \) — Total number of shares purchased across all transactions
• \( Avg\ Price \) — Average cost per share in currency/share

Explanation: This calculation helps investors understand their true cost basis per share, which is essential for determining profit/loss and making informed trading decisions.

3. Importance Of Average Price Calculation

Details: Knowing your average price is crucial for portfolio management, tax planning, risk assessment, and determining when to buy more shares or exit a position profitably.

4. Using The Calculator

Tips: Enter the total cost (including all charges) in currency and total number of shares purchased. Ensure both values are positive numbers for accurate calculation.

5. Frequently Asked Questions (FAQ)

Q1: Why is average price important in Zerodha?
A: Average price helps Zerodha users track their investment performance, calculate capital gains/losses, and make informed decisions about when to buy or sell stocks.

Q2: Does this include brokerage and taxes?
A: Yes, the total cost should include all expenses - purchase price, brokerage fees, transaction charges, GST, and SEBI charges to get the true average price.

Q3: How often should I calculate my average price?
A: Recalculate after every purchase to maintain an accurate cost basis. This helps in real-time portfolio tracking and decision making.

Q4: Can I use this for multiple purchases?
A: Yes, simply sum all your purchase costs and total shares across multiple transactions to get your overall average price.

Q5: Is this different from Zerodha's built-in average price?
A: Zerodha shows average price in your holdings, but this calculator helps verify and understand the calculation, especially when making manual portfolio tracking.