When you're deep underwater on a stock position and contemplating dollar cost averaging, you face a critical mathematical question: exactly how many shares do you need to buy at the current price to bring your cost basis down to a specific target level? This calculation becomes even more complex when you've been collecting option premiums along the way.
Guessing at these numbers leads to either buying too few shares (failing to achieve your cost basis goal) or too many shares (over-committing capital unnecessarily). Either mistake wastes money and creates operational friction in your strategy. Traders working this problem in spreadsheets often make formula errors, forget to account for premiums, or miscalculate the relationship between share count and cost basis.
MyATMM's Position Adjuster solves this problem with precision. Enter your current position details, specify your target cost basis, and the calculator instantly determines exactly how many shares you need at current prices. The tool accounts for premium credits from option selling, giving you both raw cost basis and premium-adjusted scenarios. This precision enables confident position management decisions without manual calculation errors.
The Position Adjuster feature appears in two locations within MyATMM: as a standalone tool accessible from the main menu, and integrated directly into each ticker's cost basis page. Both versions use identical calculation logic but the integrated version pre-populates your current position data automatically.
The calculator requires four essential inputs to perform its calculations:
The target price field can be left blank or manually specified. When blank, the calculator defaults to 10% above the current last price—a conservative target that builds in a small safety margin above current market levels.
After processing your inputs, the calculator displays the critical number: exactly how many shares you must purchase at the current price to achieve your target cost basis. It also shows the dollar amount required for that purchase, helping you assess whether the trade fits your available capital.
When you include premium credits in the calculation, the required share count decreases because the premiums effectively reduce your average cost. This demonstrates the power of systematic option selling—the income collected over time reduces the capital needed for position adjustments.
Let's walk through a straightforward example demonstrating the calculator's core functionality without premium considerations.
Current Position:
Current Market Conditions:
Goal: Reduce cost basis to $11.00 per share (10% above current price)
Entering these values into the Position Adjuster with target price of $11.00 produces the result:
| Calculation Result | Value |
|---|---|
| Shares to Buy | 4,200 shares |
| Cost of Purchase | $42,000 |
| New Total Shares | 4,500 shares |
| New Cost Basis | $11.00 per share |
| New Total Invested | $49,500 |
The calculation works as follows:
Your existing 300 shares at $25 cost basis represent $7,500 invested. To achieve an $11 cost basis on the combined position, your total investment divided by total shares must equal $11. If you buy 4,200 shares at $10, you invest an additional $42,000. Total investment becomes $49,500. Total shares become 4,500. Dividing $49,500 by 4,500 shares equals $11.00 per share—exactly your target.
This example demonstrates the reality of position sizing: reducing a severely underwater cost basis requires substantial additional capital. The $42,000 needed to adjust from $25 to $11 cost basis is 5.6x the original investment. This mathematical relationship explains why averaging down must be approached carefully with full awareness of capital requirements.
The Position Adjuster's real power emerges when you include premium credits from option selling. These credits reduce your effective cost basis, which in turn reduces the number of shares needed to reach your target.
Using the identical scenario as before, but now assuming you've been systematically selling options against the position:
Base Position:
Market Conditions:
Goal: Cost basis of $11.00 per share
Running the calculation with $1,500 in premium credits included produces dramatically different results:
| Metric | Without Premium | With $1,500 Premium |
|---|---|---|
| Shares to Buy | 4,200 shares | 2,700 shares |
| Capital Required | $42,000 | $27,000 |
| Capital Saved | — | $15,000 (36%) |
The $1,500 in collected premiums reduces the required share purchase by 1,500 shares and saves $15,000 in capital—a direct demonstration of option premium's impact on position management flexibility.
Including premium credits also reveals your true economic cost basis. While your simple cost basis might be $25, your premium-adjusted cost basis (accounting for the $1,500 collected) is actually $20:
Simple Cost Basis: $7,500 ÷ 300 shares = $25.00 per share
Premium-Adjusted: ($7,500 - $1,500) ÷ 300 shares = $20.00 per share
This lower effective cost basis means you're actually much closer to breakeven than the simple cost basis suggests. Understanding both numbers helps you make more informed decisions about whether continued averaging down makes strategic sense.
The integrated version of the Position Adjuster on a ticker's cost basis page automatically populates current position data, making calculations instant. Let's examine an actual NVAX position to see the tool in real-world application.
Clicking "Show Position Adjuster" on the NVAX cost basis page reveals current position metrics:
| Position Detail | Value |
|---|---|
| Current Cost Basis | $25.32 per share |
| Shares Owned | 400 shares |
| Last Price | $11.00 per share |
| Total Premium Collected | $2,142.67 |
| Simple Cost Basis | $25.32 |
| Premium-Adjusted Cost Basis | $19.96 |
The default calculation targets $12.10 (10% above $11.00 current price). Running the calculation produces two scenarios:
Target Cost Basis: $12.10 per share
Shares to Buy: 4,800 shares
Capital Required: $52,800
New Total Shares: 5,200 shares
To bring the $25.32 cost basis down to $12.10, you'd need to buy 4,800 additional shares—12x the current position size. This massive capital requirement ($52,800 vs. $10,128 currently invested) demonstrates why traders often find themselves unable to effectively average down severely underwater positions.
Activating the premium toggle to include the $2,142.67 in collected option income changes the picture dramatically:
Target Cost Basis: $12.10 per share
Shares to Buy: 3,000 shares
Capital Required: $33,000
Capital Saved vs. Raw: $19,800 (37% reduction)
The premium credits reduce required share purchases by 1,800 shares and save nearly $20,000 in capital. While $33,000 is still substantial, it's far more achievable than the $52,800 raw calculation. The premiums collected through systematic option selling create material flexibility in position management.
Rather than targeting the automatic $12.10, you might decide to aim for $20.00—your premium-adjusted cost basis. This represents economic breakeven rather than accounting breakeven. Adjusting the target price to $20.00 and excluding premium credits from the target calculation (since premium-adjusted basis already accounts for them) produces:
| Calculation Parameter | Value |
|---|---|
| Target Cost Basis | $20.00 per share |
| Current Cost Basis | $25.32 per share |
| Current Price | $11.00 per share |
| Shares to Buy | 236 shares |
| Capital Required | $2,596 |
Targeting the premium-adjusted breakeven of $20 rather than the aggressive $12.10 reduces capital requirements to just $2,596—suddenly very achievable. This calculation reveals that you're actually much closer to being able to resume meaningful covered call selling than the raw cost basis suggests.
At $20 cost basis, you could comfortably sell covered calls at strikes in the $20-$22 range, collecting premium while giving yourself room for the stock to recover. This strategic insight—enabled by the Position Adjuster—creates a clear path forward for the position.
The Position Adjuster serves multiple strategic purposes beyond simple cost basis calculations. Understanding these applications helps you leverage the tool for maximum effectiveness.
Before committing capital to average down a position, use the calculator to determine exact requirements across multiple target scenarios. Run calculations for several potential cost basis targets to see capital requirements at each level. This planning reveals which targets are realistic given your available capital and helps prevent half-measures that fail to meaningfully improve your position.
Compare calculations with and without premium credits to quantify the exact benefit your option selling strategy provides. This side-by-side comparison demonstrates in concrete dollar terms how much capital the premiums save on position adjustments. For traders questioning whether systematic option selling is worth the effort, this analysis provides clear mathematical proof of the strategy's value.
When your cost basis is above current price, the Position Adjuster helps determine optimal covered call strikes. Calculate what your cost basis would become after buying shares at various quantities, then identify which resulting cost basis allows comfortable covered call selling at strikes that generate meaningful premium while remaining below your adjusted basis.
In the NVAX example, the $20 target calculation revealed that buying just 236 shares would enable selling $20-$22 covered calls profitably. Without this calculation, you might have either avoided averaging down entirely or over-purchased shares trying to reach an unnecessarily low cost basis.
When you have open cash-secured puts and assignment looks likely, use the Position Adjuster to preview your new cost basis if assigned. Enter your current shares and cost basis, then add the 100 shares you'd receive at the put strike price. The calculator immediately shows whether assignment improves or worsens your overall position metrics.
This forward-looking analysis helps you decide whether to roll the put to avoid assignment or accept assignment strategically as part of position building.
When managing multiple positions that need capital, use the Position Adjuster on each to determine which offers the best risk-reward for additional investment. A position requiring $2,500 to reach an actionable cost basis represents a better capital deployment than one requiring $25,000 to achieve similar strategic improvement.
This comparative analysis ensures your limited capital goes where it creates maximum strategic value rather than being spread ineffectively across positions.
MyATMM provides two access points for the Position Adjuster, each optimized for different workflows.
Access the standalone version from the main navigation menu under "Position Adjuster." This version presents empty input fields where you enter all values manually. Use this version for:
Each ticker's cost basis page includes a "Show Position Adjuster" link that reveals the calculator with current position data automatically populated. This integrated version is preferred for active positions because:
The integrated version includes a toggle switch for including or excluding premium credits from calculations. The toggle has two strategic uses:
Toggle Off: Shows raw cost basis adjustment requirements ignoring premium history. Use this view to understand the pure share-count math or when planning adjustments that should stand independent of past premium collection.
Toggle On: Includes all collected premiums in calculations, showing premium-adjusted requirements. Use this view to understand your true economic position and identify achievable adjustment targets given the income you've collected.
Running both calculations side-by-side reveals the cumulative impact of your option selling strategy on position flexibility—often a powerful motivator to maintain systematic premium collection even during challenging market periods.
Position sizing decisions based on guesswork lead to capital misallocation, missed opportunities, and strategic confusion. The Position Adjuster replaces guessing with mathematical precision, answering the critical question: exactly how many shares do you need to buy to reach your target cost basis?
The calculator's true value emerges in its ability to reveal strategic opportunities that aren't obvious from simple cost basis numbers. The NVAX example demonstrated this perfectly: while the position appeared hopelessly underwater at $25.32 cost basis, the calculator revealed that a modest $2,596 investment could bring cost basis down to $20.00—a level where covered call selling becomes viable again.
For option sellers, the premium integration feature proves the concrete value of systematic income collection. Seeing that $1,500 in premiums saves $15,000 in required capital for position adjustment demonstrates in precise mathematical terms why maintaining consistent option selling discipline through market cycles creates material long-term advantages.
The tool prevents two common mistakes: under-buying shares that fails to meaningfully improve cost basis, and over-buying shares that depletes capital unnecessarily. Running multiple scenarios at different target cost basis levels reveals the optimal balance point between capital deployment and strategic improvement for your specific situation.
Integration with MyATMM's broader tracking infrastructure ensures calculations always reflect current position reality. Auto-populated data from your transaction history eliminates manual entry errors while the premium toggle lets you instantly compare raw and premium-adjusted scenarios. This seamless integration makes position adjustment calculations as simple as clicking a link and reviewing results.
Whether you're managing an underwater position that needs strategic adjustment, evaluating whether to accept assignment on cash-secured puts, or planning capital allocation across multiple positions, the Position Adjuster provides the mathematical foundation for confident decision-making. The calculator removes uncertainty, reveals opportunities, and ensures every position adjustment decision is grounded in precise numerical analysis rather than approximate guesswork.
Averaging down positions carries significant risk. Additional share purchases increase capital at risk if the stock continues declining. The Position Adjuster calculates required share quantities but does not evaluate whether averaging down is strategically appropriate for your specific situation.
Options trading involves substantial risk and is not suitable for all investors. Past premium collection does not guarantee future income or successful position recovery. Lower cost basis does not eliminate the possibility of further losses if the underlying stock continues declining.
This content is for educational purposes only and should not be considered financial advice or a recommendation to adjust any specific position. Always evaluate your risk tolerance and consult with a qualified financial advisor before making investment decisions.
MyATMM's Position Adjuster calculates exactly how many shares you need to reach your target cost basis, factoring in premium credits automatically. Stop guessing and start managing positions with mathematical confidence.
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