Average Down

DEFINITION of 'Average Down'

The process of buying additional shares in a company at lower prices than you originally purchased. This brings the average price you've paid for all your shares down.

BREAKING DOWN 'Average Down'

Sometimes this is a good strategy, other times it's better to sell off a beaten down stock rather than buying more shares.

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    An order to purchase all shares available in the market for a ...
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RELATED FAQS
  1. If I own stock that drops in price is this a sign that I should buy more?

    This is a good question, and the answer has two parts. First, let's address the concept underlying the strategy to which ... Read Answer >>
  2. What's the smallest number of shares I can buy?

    Unlike mutual funds, which can be purchased in fractional units, shares of stock cannot be divided. So, the smallest number ... Read Answer >>
  3. How can a company trade more shares in one day than there are shares outstanding? ...

    The number of shares traded in a single day can be greater than the number of a company's outstanding shares, but this is ... Read Answer >>
  4. How do I calculate my gains and/or losses when I sell a stock?

    To begin, you need to know your cost basis, or the price you paid for the stock. If you did not record this information, ... Read Answer >>
  5. What is the weighted average of outstanding shares? How is it calculated?

    The amount of shares outstanding in a company will often change due to a company issuing new shares, repurchasing and retiring ... Read Answer >>
  6. What are the different kinds of shares that a Public Limited Company (PLC) can issue?

    Learn what a public limited company is, and understand all of the various types of stock shares offered by public limited ... Read Answer >>
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