Calculate your trading profits, losses, ROI, and break-even price instantly. Factor in commission costs for accurate results.
Calculating stock trading profits accurately requires more than simply subtracting your buy price from your sell price. A complete calculation must account for the number of shares traded and any commission costs on both sides of the transaction.
The core formula for stock profit is:
Your total investment is the amount you actually spent to acquire the shares, including the buy commission. Your total revenue is the amount you receive after selling, minus the sell commission. The difference between revenue and investment is your net profit or loss.
For example, if you purchase 200 shares at $50 each with a $9.95 buy commission, your total investment is (200 × $50) + $9.95 = $10,009.95. If you later sell those shares at $58 each with a $9.95 sell commission, your total revenue is (200 × $58) − $9.95 = $11,590.05. Your net profit would be $11,590.05 − $10,009.95 = $1,580.10.
Return on Investment (ROI) is one of the most widely used metrics for evaluating the profitability of a trade. It expresses your net profit as a percentage of your total investment, making it easy to compare returns across trades of different sizes. Whether you're trading with MACD signals or Bollinger Bands, understanding your ROI helps you evaluate which strategies deliver the best returns.
A positive ROI indicates a profitable trade, while a negative ROI signals a loss. For instance, a $500 profit on a $10,000 investment yields a 5% ROI, while the same $500 profit on a $5,000 investment yields a 10% ROI. This distinction is critical for evaluating capital efficiency.
Holding period return is closely related to ROI but factors in the time dimension. If you earned 10% in one month, your annualized return would be significantly higher than 10% over a full year. When comparing strategies or trades, always consider how long your capital was tied up. A 5% return in one week may be far superior to a 15% return that took six months to achieve.
Profit per share gives you a per-unit view of your performance. It is especially useful for comparing the profitability of individual trades across different share quantities and price levels.
Trading commissions are fees charged by your broker each time you buy or sell a security. While many modern brokers have moved to commission-free trading for equities, commissions still apply to options, futures, and certain international markets. Even small fees can compound into significant costs over many trades.
Commissions affect your trading in several important ways:
To minimize the impact of commissions, consider trading with a broker that offers competitive or zero-commission pricing, batching smaller orders into larger trades, and avoiding excessive trading frequency. Always include commissions in your profit calculations to get an accurate picture of your real returns.
Net Profit = (Sell Price × Shares − Sell Commission) − (Buy Price × Shares + Buy Commission). For example, buying 100 shares at $50 and selling at $60 with $5 commission each way gives you: ($60 × 100 − $5) − ($50 × 100 + $5) = $5,995 − $5,005 = $990 net profit. Always remember to include both buy and sell commissions in your calculation for an accurate result.
ROI measures the percentage return relative to your total invested capital. It is calculated as ROI = (Net Profit / Total Investment) × 100. A positive ROI means you earned money on the trade, and a negative ROI indicates a loss. ROI is valuable because it lets you compare the efficiency of different trades and investments regardless of their absolute dollar amounts.
Commissions reduce your net profit on every trade. They are charged when you buy and again when you sell, increasing your total cost basis and raising the break-even price your stock must reach before you start profiting. For active traders making many trades, commissions can accumulate into a significant annual cost that erodes overall portfolio returns.
The break-even price is the price at which your total costs equal your total revenue, resulting in zero profit or loss. It includes your original purchase price plus the per-share cost of all commissions. Knowing your break-even price is essential for setting realistic profit targets and stop-loss levels, ensuring you account for all trading costs before determining whether a trade is worth entering.
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