CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
US English

What is an average price?

Average price definition

In instances where you’ve got a range of different prices, it can be useful to simplify the numbers into one single value. Average price is a key calculation when buying goods or services, and investors use it to see how profitable their stocks and bonds are.

Where have you heard about average price?

Average price is used in a variety of everyday situations, from calculating house prices and rent costs to petrol and food prices. Data is taken from various places around a country to come up with the average price of numerous goods and services. Depending on where you live, you may be paying higher or lower than the national average.

What you need to know about average price.

In terms of investments, many of you will decide to make an initial lump sum purchase of shares of stock and then add to it at different prices. It's important to know what the average price of your stock position is to help you determine whether it’s a profitable investment or not.

To calculate the average purchase price of your shares you have to divide the total amount invested by the total number of shares bought.

The average price of a bond is calculated by adding its face value to the price paid for it and dividing the total by two.

Related Terms

Latest video

Latest Articles

View all articles

Still looking for a broker you can trust?

Join the 620,000+ traders worldwide that chose to trade with

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading