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.

  1. Average Up

    The process of buying additional shares at higher prices. This ...
  2. Original Cost

    Original cost is the total cost associated with the purchase ...
  3. Origination Points

    A type of fee borrowers pay to lenders or loan officers to compensate ...
  4. Accumulating Shares

    Common stock given to current shareholders of a company in place ...
  5. Origination Fee

    An origination fee is an up-front fee charged by a lender for ...
  6. Gifted Stock

    Stocks given from one person or entity to another person or entity. ...
Related Articles
  1. Investing

    First-Time Homebuyer's Guide

    Buying a home for the first time can seem daunting. Learn the buying process & what to watch out for in order to be a successful first time home buyer.
  2. Personal Finance

    5 Ways To Refresh Your Resume

    Keep your resume relevant, concise and engaging, and you can expect an interview soon.
  3. Trading

    Fix Broken Trades With the Repair Strategy

    You can recover from your losses if you know how to use this handy trader's tool.
  4. Taxes

    Do You Have to Pay Taxes on Home Sales?

    Taxes are only paid on home sales if your proceeds exceed a certain amount.
  5. Investing

    6 Signs It's Time To Buy A House

    Are you ready to buy a home? Find out if it's the right time for you to enter the real estate market.
  6. Managing Wealth

    7 Reasons To Review Or Revise Your Will

    Drafting a will and locking it away for good could negatively affect your beneficiaries.
  7. Investing

    Your Investments: When to Sell and When to Hold

    Consider these tips when deciding whether to sell or hold an investment position. Smart investors not only know when to sell, but why and how to sell.
  8. Investing

    7 Stock Buying Mistakes And How To Avoid Them

    No investor is flawless. Here are some common investing fallacies and a step-by-step guide on how to avoid them when buying stocks.
  9. Financial Advisor

    Paying Down Debt Early

    For those with a strong aversion to having debt, here is an approach that can enable individuals to pay down debt more quickly than scheduled.
  10. Investing

    How To Buy A House In Another City

    Finding an agent, doing your research, feeling out neighborhoods etc.
Hot Definitions
  1. Money Market

    The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities ...
  2. Perfect Competition

    Pure or perfect competition is a theoretical market structure in which a number of criteria such as perfect information and ...
  3. Compound Interest

    Compound Interest is interest calculated on the initial principal and also on the accumulated interest of previous periods ...
  4. Income Statement

    A financial statement that measures a company's financial performance over a specific accounting period. Financial performance ...
  5. Leverage Ratio

    A leverage ratio is any one of several financial measurements that look at how much capital comes in the form of debt, or ...
  6. Annuity

    An annuity is a financial product that pays out a fixed stream of payments to an individual, primarily used as an income ...
Trading Center