Average cost | Robinhood

Average cost

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Robinhood defines Average Cost as the weighted average amount paid for shares (buys). It's calculated based on buy orders only.

It's also an input to the total return calculation:

Total return = (Market price - Average cost) * Total shares

$513.11 = ($3,522.50 - $3,419.88) * 5

(calculation may reflect sub-penny rounding with all amounts in US Dollars)

Average cost is used as a reference point for estimating unrealized gains, and not intended for tax purposes.

Example of multiple purchases

When calculating your average cost, you must include all purchases made while holding an asset. This calculation resets when you close out of a position in its entirety (zero shares).

Activity dateActivityQuantityPriceTotal amountAverage cost
20 Dec.Buy2$325-$650$325
10 Jan.Buy2$330-$660$330
15 Jan.Buy fractional0.55$320-$176$320
15 Jan.Buy fractional0.65$325-$211$325

Example of multiple trades

If you have multiple trades (buys and sells) but still own shares, the average cost calculates the weighted buy prices with the current quantity of the position. When selling, only the quantity changes in the calculation and the average buy prices will remain the same. As soon as a $0 (zero) position is established, the average cost calculation starts fresh.

Activity dateActivityQuantityPriceTotal amountAverage costExplanation
8 Dec.Buy2$700-$1,400$7002 shares at $700
9 Dec.Buy2$300-$660$5002 shares at $700 and 2 at $300
12 Dec.Sell-2-$796$1,592$5002 shares at $500, the average cost doesn't change
14 Dec.Buy2$700-$1,400$6002 shares at $500 and 2 shares at $700
16 Dec.Buy2$800-$1,600$666.672 shares at $500, 2 shares at $700 and 2 shares at $800

Disclosures

Robinhood U.K. Ltd (Robinhood UK) is authorised and regulated by the Financial Conduct Authority (FRN: 823590). Robinhood UK onboards UK customers and has the lead customer relationship with UK customers in relation to their use of the Robinhood UK app and website. Robinhood UK introduces UK customers to Robinhood Securities, LLC for order routing, execution, clearing, settlement, arranging custody services and margin lending to eligible UK customers with margin accounts. Robinhood Securities, LLC is regulated in the US by the SEC and FINRA. Robinhood UK and Robinhood Securities, LLC are subsidiaries of Robinhood Markets, Inc.

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Robinhood U.K. Ltd (Robinhood UK) is authorised and regulated by the Financial Conduct Authority (FRN: 823590). Robinhood UK onboards UK customers and has the lead customer relationship with UK customers in relation to their use of the Robinhood UK app and website. Robinhood UK introduces UK customers to Robinhood Securities, LLC for order routing, execution, clearing, settlement, arranging custody services and margin lending to eligible UK customers with margin accounts. Robinhood Securities, LLC is regulated in the U.S. by the SEC and FINRA. Robinhood UK and Robinhood Securities, LLC are subsidiaries of Robinhood Markets, Inc.

Robinhood U.K. Ltd is a private limited company registered in England and Wales (09908051).

Robinhood does not provide investment advice. Individual investors should make their own decisions.

Commission-free trading of stocks refers to $0 commissions for Robinhood self-directed individual brokerage accounts that trade U.S. listed securities and ADRs. Keep in mind, other costs such as regulatory fees may apply to your brokerage account. Please see Robinhood UK’s Fee Schedule to learn more.

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All investing involves risk and a loss of principal is possible.

Robinhood U.K. Ltd (Robinhood UK) is authorised and regulated by the Financial Conduct Authority (FRN: 823590). Robinhood UK onboards UK customers and has the lead customer relationship with UK customers in relation to their use of the Robinhood UK app and website. Robinhood UK introduces UK customers to Robinhood Securities, LLC for order routing, execution, clearing, settlement, arranging custody services and margin lending to eligible UK customers with margin accounts. Robinhood Securities, LLC is regulated in the U.S. by the SEC and FINRA. Robinhood UK and Robinhood Securities, LLC are subsidiaries of Robinhood Markets, Inc.

Robinhood U.K. Ltd is a private limited company registered in England and Wales (09908051).

Robinhood does not provide investment advice. Individual investors should make their own decisions.

Commission-free trading of stocks refers to $0 commissions for Robinhood self-directed individual brokerage accounts that trade U.S. listed securities and ADRs. Keep in mind, other costs such as regulatory fees may apply to your brokerage account. Please see Robinhood UK’s Fee Schedule to learn more.

UK Privacy policy

© 2024 Robinhood. All rights reserved.