Cost basis
Cost basis is the average price you paid per share, and it is the number every profit or loss is measured against.
Buy one share at $100 and another at $140, and your cost basis is $120. At $130 the position is up, even though your second buy is down.
This is why adding to a falling position — averaging down — feels like it helps: it lowers the basis, so a smaller recovery gets you back to even. It also increases how much you have riding on one idea being right, which is the part people forget.
In Stoxhatch
Buying more of something you already own moves your average cost, and the Portfolio card shows the new figure.
Related
- Position — A position is what you currently own in one company: how many shares, and what you paid for them.
- Unrealized P/L — Unrealized P/L is the profit or loss you would make if you sold right now — real on screen, but not banked until you sell.
Try it with $10,000 of simulated cash, no signup needed — or browse the rest of the glossary.