Define: Average Up

Average Up
Average Up
What is the dictionary definition of Average Up?
Dictionary Definition of Average Up

Average Up:

Verb: The act of increasing the average price at which an investor has purchased a particular security or asset by buying additional shares or units at a higher price than the initial purchase. This strategy is often employed by investors who believe that the price of the security will continue to rise, and by purchasing more shares at a higher price, they aim to improve their overall average cost per share. The intention behind averaging up is to maximize potential profits and reduce the impact of any losses. However, it also carries the risk of increasing the potential loss if the price of the security declines.

Full Definition Of Average Up

Average Up is a term used in finance to describe a strategy where an investor purchases additional shares of a stock at a higher price than the original purchase price in order to lower the average cost per share. This strategy is often employed when the investor believes that the stock’s price will increase in the future and wants to take advantage of the opportunity to buy more shares at a lower average cost. However, it is important to note that average up does not guarantee profits and carries risks, as the stock price may not increase as anticipated. Investors should carefully consider their investment goals and consult with a financial advisor before implementing an average up strategy.

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This glossary post was last updated: 29th March 2024.

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