iWeb - book cost

colb15

Hi All

Maybe missing something really simple but can't seem to work out the avg share price and book cost that iWeb are displaying for one of my holdings. I have numerous buys and a couple of sells. My understanding is the average share price only takes into account the buys? Is that correct?

EdSwippet

colb15 wrote: »

My understanding is the average share price only takes into account the buys? Is that correct?

Yes. The Average Price per Share isn't affected by sales, only purchases.

Take a simple example. Buy 100 shares at £1/share, and you have an Average Price per share of £1. Then later buy another 100 shares at £2/share. You now hold 200 shares with a Book Cost of £300 and Average Price per Share of £1.50. You then sell 100 shares. You now own 100 shares with a Book Cost of £150, so your holding's overall Book Cost (its 'cost basis') has halved. But because you also now own only half as many shares as before, your Average Price per Share has not changed. Still £1.50.