Stocks & Investing · How to use
DCA / Dilution Calculator
Follow the steps to enter your numbers and check the limits.
Updated 2026-10-25 · ThinkVault Tools
Get started in three steps
- 1
Step 1
Prepare your amounts, terms and applicable rates or prices.
- 2
Step 2
Open the tool, check the units and compare scenarios.
- 3
Step 3
Read the results and notes. Check official documents and sources before deciding.
Method and common questions
How is stock averaging down (DCA) calculated?
Averaging down lowers your average cost per share by purchasing additional shares at a lower market price. The basic formula is New Average Cost = (Existing Cost Basis + New Capital Added) ÷ (Existing Shares + New Shares Bought). This tool works in reverse to find the exact share count and capital needed to reach a target average price.
Example: averaging 100 shares from $100 down to $75
Suppose you hold 100 shares at an average cost of $100 ($10,000 invested) and the stock trades at $60. To bring your average cost down to $75, you need to buy 167 shares at $60 (adding $10,020), bringing your total position to 267 shares at an average cost of about $75.
Key risks to watch when averaging down
- Your target average price must be higher than the current market price; the closer it is to the market price, the more capital is required.
- Averaging down increases single-stock concentration and capital at risk without guaranteeing a price recovery.
- Real-world trades also incur brokerage commissions, platform fees, stamp duty and bid-ask spreads.
FAQ
- Why does the calculator say the target average is impossible?
- If the current market price is equal to or above your target average cost, buying more shares cannot lower your average to that target. Raise the target average or wait for a lower entry price.
- Are brokerage fees and taxes included in the figure?
- No. The tool uses pure price-and-share math for quick budgeting; add your broker's commission, exchange fees and stamp duty when placing orders.
Method
Target-average formula: Shares to buy = Existing shares × (Current average − Target average) ÷ (Target average − Current price), rounded up to whole shares. Board lots vary by security; verify the actual lot. 1 means whole shares; no ticker-based guess is made.
Last checked: 2026-08-21