Cost basis
Also called: average cost
Cost basis is what you paid for an investment, including fees, used to work out your gain or loss when you sell.
If you buy the same stock at different prices, your average cost per share is the total paid divided by the shares owned.
Formula
Average cost = total paid ÷ shares owned
Related terms
- Capital gain: A capital gain is the profit from selling an investment for more than you paid for it; selling for less is a capital loss.
- Wash sale rule: The wash sale rule stops you from claiming a tax loss if you buy the same or a substantially identical investment within 30 days before or after selling it at a loss.
Practise with $10,000 in play money
Free. No real money involved.
For learning only. This isn't financial advice.