Average cost price
Average per-share cost of your purchases.
The average cost basis (or cost per share) is the total amount paid to acquire a position divided by the number of shares held. It is the accounting reference for calculating profit or loss: the difference between the current price and the average cost, multiplied by shares held.
On Lucex you enter the average cost manually along with the ticker and number of shares — this is the only purchase data the system asks for. There is no broker connection, a deliberate privacy choice: the less data Lucex handles, the smaller the attack surface. The trade-off is that if you buy a stock in multiple tranches, you need to recalculate your average cost before updating it.
Worked example
On February 1, 2026, you buy 10 shares of Apple at $250. On April 15, 2026, you buy another 10 shares at $290. Average cost = ((10 × 250) + (10 × 290)) ÷ 20 = (2,500 + 2,900) ÷ 20 = 5,400 ÷ 20 = $270.
If you sell all 20 shares on May 17, 2026, at $300, realized P&L is (300 − 270) × 20 = $600. Broker commissions should strictly be added to the total cost (e.g. $5/trade × 2 trades = $10, effective average cost $270.50). Lucex does not handle commissions — users can choose to fold them into the cost they enter.
When it's used
The average cost serves primarily for P&L tracking (knowing whether you are in profit or loss) and for tax calculation (the taxable gain is the realized P&L). On Lucex it provides contextual framing in the analysis: 'the current price is 11% above your cost basis' is useful information. It should be read as information, not as a trigger: the fact that you are 'at breakeven' on a position says nothing about the stock's future value.
Limits
Average cost is one of the strongest psychological triggers for investment mistakes. It is the foundation of anchoring ('I want to sell when I get back to breakeven') and loss aversion. Rationally, the price you paid is irrelevant to the market: the stock is worth what it is worth today, independent of your cost basis. Rational decisions are based on expected forward value, not on where you stand relative to your entry.
Frequently asked
Does the average cost change when I add shares?
Yes. If you hold 10 shares at a $250 average and add 10 more at $200, your new average is $225. Adding shares below your cost basis lowers it ('averaging down'); adding above raises it ('averaging up').
Does it affect taxes?
Yes. The taxable P&L is (sale price − average cost) × shares sold. Tax treatment varies by jurisdiction and account type. Keep records of each purchase tranche if your broker does not calculate this automatically.
Does my broker's average cost include commissions?
It depends on the broker. Some include them by default; others do not. To be precise, add total commissions to the total cost before dividing by shares. The difference is marginal per trade but can become meaningful across many transactions.
Related terms
Educational definition. Not financial advice.