Investing

Understanding Cost Basis

March 14, 2026

Cost basis (average price) is one of the most important metrics for investors. Understand how it works and how PaxMoney calculates it automatically.

What is cost basis?

Cost basis is the average acquisition cost of an asset, considering all purchases made.

Example: - Purchase 1: 100 shares at $20 = $2,000 - Purchase 2: 50 shares at $25 = $1,250 - Cost basis: $3,250 ÷ 150 = $21.67

If the stock is at $30, your profit per share is $8.33 (38.5%).

PaxMoney calculates cost basis automatically with each operation, including adjustments for splits, mergers, and spin-offs.

Frequently Asked Questions

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