Purchase price

What is the purchase price

The purchase price is the amount an investor or trader pays to acquire an asset, such as stocks, a bond, an ETF, or another financial instrument. This price includes the asset's market value and, in some cases, also transaction costs such as broker fees.

How the purchase price is determined

The purchase price is derived from the current market price at the time the trade is executed. It is influenced by:

• supply and demand in the market,
• trading volume and liquidity,
• current economic and political events,
• the time the purchase is executed (e.g., prices can swing within seconds during volatility).

Significance of the purchase price for the investor

• Serves as the baseline for calculating profit or loss.
• Helps with the decision to sell an asset.
• Is important for tax purposes when calculating capital gains.

Purchase price and long-term investments

In long-term strategies such as buy and hold or DCA, the average purchase price may gradually decrease or increase as further investments are made.

Purchase price on Stonkee

On Stonkee you can track the purchase prices of individual positions, compare them with the current market value, and calculate portfolio performance. The AI alerts you when preset target prices are reached.

Summary

The purchase price is a key figure for every investor. Properly tracking and evaluating this value allows you to better manage risk and optimize investment decisions.