How to calculate break-even price after averaging down

CoTrading editorial team 2026-09-23

After you add to a position, two numbers matter: the new average entry, and the price at which closing the whole thing returns exactly what you put in. They are not the same number, and neither is the simple average of the prices you paid. By the end of this page you will be able to compute both by hand or in a spreadsheet, fees included, for longs and shorts — and check the result against what your venue displays.

This is the calculation only. Whether adding to a losing position is a good idea is a separate question, covered in averaging down vs dollar-cost averaging and scaling in vs entering all at once. The break-even calculator runs the two-entry case for you.

Before you start

You need, for every fill that makes up the position:

Quantity and price of each fill, from your fill or trade history — not from the order. One order can fill in several pieces at different prices; see order lifecycle and partial fills.
The fee actually charged on each fill, or the rate applied. Maker and taker fills are often charged differently — maker vs taker fees explains why.
Which asset the fee was charged in. Quote currency, the asset you bought, or something else. This changes step 1.
The fee rate you expect to pay on exit. Use your own schedule; the venue’s fee page is the source, not this article.

The examples below use an illustrative fee of 0.1% per side. It is not any venue’s rate.

Step 1: List every fill

Worked example — a long built in two entries:

Fill	Quantity	Price	Notional
First entry	2	100	200
Second entry	3	85	255
Total	5		455

If a fee was deducted from the asset you received rather than charged in the quote currency, record the quantity you actually hold, not the quantity you ordered. More on that below.

Step 2: Compute the weighted average entry

average entry = Σ(quantity × price) ÷ Σ quantity
              = 455 ÷ 5
              = 91.00

Note that the simple average of the two prices is 92.50. The weighted average is lower because the second, cheaper entry was larger. The size of the addition matters as much as its price — a small addition barely moves the average, a large one drags it most of the way to the new price.

In a spreadsheet with quantities in column B and prices in column C:

=SUMPRODUCT(B2:B3, C2:C3) / SUM(B2:B3)

Step 3: Add the entry fees

Entry fees are part of what you paid. At 0.1% per side on 455 of notional:

entry fees = 455 × 0.001 = 0.455
cost basis = 455 + 0.455 = 455.455
cost per unit = 455.455 ÷ 5 = 91.091

If fills were charged different rates, sum the fees actually charged. For instance, three fills of 1 at 100 (taker, 0.1%), 1.5 at 90 (maker, an illustrative 0.02%) and 2.5 at 82 (taker, 0.1%) give an average entry of 88.00 and total fees of 0.332 — so the cost per unit is 88.066 rather than the 88.088 you would get by assuming the taker rate throughout.

Step 4: Account for the exit fee

Closing costs a fee too, charged on the exit notional. Break-even is the price where the proceeds, after the exit fee, equal the cost basis:

Long:  break-even = cost basis ÷ (quantity × (1 − exit fee rate))
                  = 455.455 ÷ (5 × 0.999)
                  = 91.18

When the same percentage applies on both sides, this simplifies to average entry × (1 + f) ÷ (1 − f), which is what the calculator uses.

Check it: selling 5 at 91.18218 yields 455.911, minus an exit fee of 0.456, leaves 455.455 — exactly the cost basis. The fee gap is small here, and it grows with turnover; fee drag over a year covers the cumulative version.

Step 5: Compare it against not adding

The number people compute is the move needed from the current price to break even. The number worth computing alongside it is the same figure for the position you had before adding:

	Break-even	Move needed from 85
After adding	91.18	+7.3%
Original 2 units only	100.20	+17.9%

That is the arithmetic case for averaging down, and it is real. The other half: position size went from 2 units to 5, so a further 10% fall from 85 now costs 42.5 instead of 17.0. Both effects are in the same trade. Check the combined size against your original plan with the position size calculator.

Shorts

The direction of the fee adjustment flips. You receive the proceeds on entry and pay on exit:

Short: break-even = average entry × (1 − f) ÷ (1 + f)

Example: short 2 at 100, then add 3 at 115. Average entry is (200 + 345) ÷ 5 = 109.00, and break-even at 0.1% per side is 108.78 — below the average entry, because fees have to be recovered by the price falling further.

How to tell it worked

Quantity × average entry equals total notional. 5 × 91.00 = 455. If it does not, a fill is missing or double-counted.
The average sits between your highest and lowest fill prices, closer to the larger fills.
Plug the break-even back in. Proceeds at that price minus the exit fee should equal your cost basis to within rounding, as in step 4.
Compare with the venue’s display. Venues generally show an average entry, and whether it includes fees varies. If yours matches your step 2 figure rather than step 3, that is why.

What usually goes wrong

Averaging the prices instead of the fills. 92.50 instead of 91.00. The simple average is only right when every fill is the same size.
Using the ordered quantity when the fee came out of the asset. If a 0.1% fee is deducted from the units you buy, ordering 3 gets you 2.997. Across both fills you hold 4.995, not 5 — the break-even barely moves, but a spot exit order for 5 will typically fail for insufficient balance.
Mixing in realised profit from a partial exit. If you sold part of the position, venues differ in whether that realised PnL adjusts the displayed entry. Keep realised and open PnL separate in your own records — partial exits and expectancy explains why it matters for evaluation too.
Ignoring funding on perpetuals. Leverage does not change the break-even price, since margin never enters the formula, but funding payments accrue while you hold. See how to calculate futures PnL.
Moving the stop to the new average. The break-even is a price the position needs; it is not an invalidation level. Moving the stop to suit the larger position is widening a stop — how to set a stop-loss.

FAQ

How do I calculate my average entry price after averaging down?

Multiply each fill’s quantity by its price, add those up, and divide by the total quantity. It is a weighted average, so a larger addition pulls the average further toward its price than a smaller one. The simple average of the prices is only correct when every fill was the same size.

Why is my break-even price higher than my average entry?

Because of fees. You paid a fee on entry and will pay another on exit, both charged on notional, so a long has to rise slightly above its average entry before closing it returns what you put in. For a short the break-even sits slightly below the average entry, for the same reason.

Does leverage change the break-even price?

No. The break-even depends on the fill prices, quantities and fees, and margin does not enter the calculation. Leverage changes how much a given move costs relative to your margin and where liquidation sits, and on perpetual contracts funding payments can shift the effective break-even the longer you hold.

Why does my exchange show a different average entry?

Usually because it excludes fees, while your calculation includes them, or because it treats realised profit from a partial close differently. Check whether your step 2 figure — the fee-free weighted average — matches the display. If it does, the difference is fees.