1. What is Average Share Price?

The average share price represents the mean price paid per share when purchasing multiple shares at different prices or in multiple transactions. It's calculated by dividing the total amount spent by the total number of shares acquired.

2. How Does the Calculator Work?

The calculator uses the simple formula:

Where:

• Total Cost — Sum of all amounts spent on share purchases (in pounds)
• Shares — Total number of shares acquired

Explanation: This calculation gives you the effective price per share across all your purchases.

3. Importance of Average Price Calculation

Details: Knowing your average share price is essential for tracking investment performance, determining break-even points, and making informed decisions about when to sell.

4. Using the Calculator

Tips: Enter the total amount spent in pounds (including any fees or commissions) and the total number of shares purchased. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Should I include trading fees in the total cost?
A: Yes, for accurate calculation of your true cost basis, include all fees and commissions paid for the transactions.

Q2: How does this differ from weighted average price?
A: This is a simple average. For multiple purchases at different prices, you should use the total cost and total shares, which effectively gives you a weighted average.

Q3: What if I bought shares in different currencies?
A: Convert all purchases to pounds using the exchange rate at the time of each transaction before summing the total cost.

Q4: How precise should the calculation be?
A: For most purposes, calculating to 4 decimal places (for GBP) is sufficient, though some platforms may show more precise values.

Q5: Does this work for fractional shares?
A: Yes, the calculator can handle fractional share quantities if you enter them as decimal numbers.