Stock Profit Calculator
Frequently Asked Questions
How is stock profit calculated?
Stock profit is calculated using the following formula:
- Total Cost Basis = (Shares x Buy Price) + Buy Commission
- Total Proceeds = (Shares x Sell Price) - Sell Commission
- Net Profit/Loss = Total Proceeds - Total Cost Basis
- Percentage Return = (Net Profit/Loss / Total Cost Basis) x 100
What is annualized return?
Annualized return shows your investment performance as a yearly rate:
- Converts total return to an equivalent annual rate
- Useful for comparing investments held for different periods
- Accounts for compound growth over time
- Formula: ((1 + Total Return)^(1/Years) - 1) x 100
Should I include trading commissions?
Including commissions gives you the true net profit:
- Many brokers now offer commission-free trading
- Traditional brokers may charge per-trade fees
- Commissions reduce your actual profit
- Enter 0 if your broker offers free trades
What is the difference between profit and return?
Profit and return measure gains differently:
- Profit is the dollar amount gained or lost
- Return is the percentage gain or loss
- Return helps compare different sized investments
- Both are important for evaluating investment performance
Does this calculator account for taxes?
This calculator shows pre-tax profit:
- Capital gains taxes are not included in the calculation
- Short-term gains (held less than 1 year) are taxed as ordinary income
- Long-term gains (held 1+ years) receive favorable tax rates
- Consult a tax professional for after-tax calculations