Stock Profit Calculator

Calculate your profit or loss for an investment using our stock calculator below.

Purchase
$
per share
Sale
$
per share

Results:

Net Purchase Price:
$
Net Sell Price:
$
Profit/Loss:
$
ROI:
 %
 
Purchase Commission:
$
Sell Commission:
$
Learn how we calculated this below


On this page:


How to Calculate Stock Profit (or Loss)

Stocks are traded each weekday, with the exception of holidays. During that time, their prices fluctuate up and down based on what the market says, and this fluctuation is a supply and demand economic effect.

As more people demand the stock (want to buy it), the higher its price will go. Alternatively, as more people want to supply the stock to the market (looking to sell it), the farther down its price will go.

Eventually the price reaches an equilibrium price, which is where each trade occurs.

The stock profit calculator will provide the fastest and easiest way to calculate the ROI of a particular investment.

You can also use our interest calculator to see how much your investment would grow assuming constant contributions and a constant interest rate. The “compound interest” tab will provide accurate results if the gains are left in the investment.

Use our stock averaging calculator to calculate the average share price if you’ve built up the investment over time by buying shares at different prices.

Stock Gains Formula

The stock profit formula is a four-step process that is based on the stock profit calculator:

Step 1: net purchase price = (# shares × purchase price) + commission
Step 2: net sell price = (# shares × sell price) – commission
Step 3: profit (loss) = net sell price – net purchase price
Step 4: ROI = profit (loss) ÷ net purchase price

Where:
# shares = total number of shares purchased
purchase price = price per share paid
sell price = price per share sold
commission = commission charged by broker when purchasing or selling shares

For example, let’s assume that you have purchased 200 shares of ABC at $5 each and sold them for $6. The buying and selling commissions are both at 0.1%. What would the ROI be?

Step 1

net purchase price = (200 × $5) + 200 × $5 × 0.1%
net purchase price = $1,001.00

Step 2

net sell price = (200 × $6) – ($200 × $6 × 0.1%)
net sell price = $1,198.80

Step 3

profit (loss) = $1,198.80 – $1,001.00
profit (loss) = $197.80

Step 4

ROI = $197.80 ÷ $1,001.00
profit (loss) = 19.76%

In this scenario, your return on investment would have been nearly 20%.

Accounting for Brokerage Commissions

When you buy a stock, you will typically have to pay slightly more than its current trading price. Additionally, when you sell it, you will need to accept a price that is fractionally lower than its current price.

This is called the spread or the brokerage commission that the financial broker takes for conducting the transaction on your behalf.

In our example, the brokerage commission on both transactions was 0.1%. When we purchased the stock, the commission was $1.00. This is found by multiplying 200 × $5 × 0.1%.

When we sold the stock, the brokerage commission was $1.20. This is found by multiplying 200 × $6 × 0.1%.

When we buy a stock, we add the commission in step 1 because this commission is paid when the stock is purchased. When we sell, we subtract the broker’s commission in step 2. We don’t keep the full amount because the broker gets their cut.

Accounting for Capital Gains Tax

Capital gains taxes apply once a stock is sold. The tax rate is determined by the length of time that a stock is held. If the stock is held for less than a year, the short term capital gains rate applies. However, if you wait at least a year before you sell, the long term capital gains rate will be used.

If you sell a stock within a year and incur the short term capital gains tax, this is treated as income and you will be taxed at your income tax bracket. If you are in the 22% tax bracket, you will then pay 22% in taxes of the capital gain for the stock sale.

However, the long term capital gains tax rate is 15% so, you would pay less in taxes by holding onto the stocks for at least a year.

In our example above, you would only pay taxes on your profit, which was $197.80. If the stock was held for less than a year and you are in the 22% tax bracket, the taxes would be $43.52. If the stock was held for more than a year, the taxes owed would be $29.67.

When Should You Sell Your Stock?

You should sell your stock when you would no longer purchase it today or if your earnings have reached a certain threshold. For example, let’s say you purchased a stock at $10 a few years ago, and now it is trading at $8 a share or down 20%.

Would you buy that stock right now at $8 if you didn’t already own it? If the answer is no, then you should sell it. If you would still buy it today, then you should hold onto it.

Also, some investors use a trailing stop. When you first purchase a stock, you can set a maximum you are willing to lose. Let’s say that number is 30%. If you purchased a stock at $10, then your broker will automatically sell it for you if the price falls below $7.

You should also consider selling a stock when the value of the stock is a significant portion of your portfolio and you want to rebalance your portfolio, your profits have reached a certain percentage, the market is uncertain, or you are considering particular life changes (retirement, buying a house, etc.).

As with any financial decision, you should consult with your financial advisor when making this choice.

How to Calculate the Break Even Share Price

The breakeven point is when the ROI is equal to 0%. This can be found by taking the net purchase price found in Step 1, setting it equal to the net selling price equation in Step 2, and solving for the price.

Let’s use the figures in our example above.

$1,001.00 = (# shares × sell price) + commission
$1,001.00 = (200 × sell price) – 200 × sell price × 0.1%
$1,001.00 = (200 × sell price) – (0.2 × sell price)
$1,001.00 = (199.8 × sell price)
$5.01001 = sell price

Since the commissions were small, you would only need to sell it at about a penny higher than you originally purchased the stock to break even. If the commissions were higher, the break even share price would be higher as well.

For example, if the commissions were both 2%, the breakeven price would increase to $5.204.

Do Stocks Offer a Good ROI?

Stocks have historically offered the best returns. On average, stocks have returned 10% annually, which is higher than the 6% return on investment from bonds. It is also much higher than a certificate of deposit (CD) or a savings account at a bank.

But because of this higher return on investment, stocks are the riskiest investment. The swings up and down are higher for stocks than bonds, CDs, or savings accounts.

This is why financial planners recommend investing primarily in stocks at an early age and gradually shift to lower risk investments as retirement age approaches.

This is not financial advice or a guarantee of success, so be sure to consult with a financial professional and understand the risk associated with stocks before investing.