How to calculate stock profit
Profit on a stock is the difference between what you get when you close the trade and everything it cost you to open and close it. The share price movement is only part of it: commissions, exchange fees, dividends and tax all change the number that ends up in your account.
Profit = (Sell price − Buy price) × Shares − Buy fee − Sell fee + Dividends − Tax
Your return (ROI) divides that profit by what you put in: the cost of the shares plus the buy fee. A $500 profit on $5,000 is a 10% return; the same $500 on $50,000 is 1%.
Return = Profit ÷ (Buy price × Shares + Buy fee)
Tip: brokers charge on both the buy and the sell. Enter the total for both trades, or switch to Use % if your broker charges a percentage of each trade.
Worked example
You buy 100 shares at $50 and sell them at $60. Your broker charges $5 per trade.
- The price gain is (60 − 50) × 100 = $1,000.
- Fees are $5 to buy and $5 to sell: $10. Profit = $1,000 − $10 = $990.
- You put in 50 × 100 + $5 = $5,005, so the return is 990 ÷ 5,005 = 19.78%.
- Break-even: you need the sale to cover $5,005 plus the $5 sell fee, so (5,005 + 5) ÷ 100 = $50.10 a share.
The break-even price
Your break-even is the sell price at which you make exactly nothing after fees. It is always a little above your buy price, because you have to earn back the fee you paid to get in and the one you will pay to get out. With a fee charged as a percentage (say 0.1% each way), the break-even is buy price × (1 + fee) ÷ (1 − fee). Dividends you collect lower it; for a short, dividends you owe raise it.
Short selling
A short reverses the order: you sell borrowed shares first and buy them back later. You profit when the price falls: (entry − exit) × shares, minus fees. Two things are different from a long: you pay any dividends the stock declares while you are short, and your loss has no ceiling because a price can keep rising. This calculator does not include stock-borrow fees or margin interest; check those with your broker, or use the margin calculator.
Annualised return
Add your buy and sell dates and the calculator turns the return into a yearly rate, so a 10% gain over three months and a 10% gain over three years can be compared fairly: (1 + return)365 ÷ days − 1. Treat annualised figures for holding periods under a month with care; a 3% move in a week annualises to over 300%.
Common mistakes
- Forgetting one side of the fees. Most people subtract the commission once. You pay it to buy and to sell.
- Measuring return against the sale. Return is profit over what you put in, not over what you got back.
- Mixing up percentage gains and losses. A 50% fall needs a 100% rise to get back to even. The table under the calculator shows this.
- Ignoring tax. If you pay capital-gains tax, the money you keep is smaller than the headline profit. Enter your rate to see the after-tax figure.
Assumptions
How this calculator works. Fees are charged on top of the shares you buy (they are not taken out of the amount invested), either as a flat amount or as a % of that side's trade value. Return is measured against the cost of the shares plus the buy fee. Tax is applied to a profit only, at the single rate you enter; it ignores holding-period rules, allowances and loss carry-forwards. Short results exclude borrow fees and margin interest.
