What happens to your average cost when you average down?
Averaging down is not a feeling. It is a new cost basis. Check the updated break-even first, then decide whether adding size still makes sense.
New average cost after one more buy
Holding 100 shares at $100 and adding 50 shares at $80 lowers the average, but not as much as people intuitively expect.
Updated average cost$93
Total shares150
Total invested$14,000
What if the drop is deeper?
The same add-on size at a lower price changes the average faster. That is the comparison users usually want next.
Total shares150
Total invested$13,500
Leverage sanity check
Before borrowing into a falling position, compare the financing drag against the return you actually need.
Total interest$500
Total return$800
Next steps
Use the new average cost as the decision anchor, then review whether the risk still fits your plan.