Calculate Stock Profit

Understanding Stock Profit Calculation

Calculating the profit or loss from stock investments is a fundamental aspect of investing. It helps you understand the performance of your trades and make informed decisions. This calculator breaks down the process, considering not just the price difference but also associated costs like commissions and fees.

The Formula Explained

The core formula for calculating stock profit is:

Total Profit/Loss = (Selling Price per Share – Purchase Price per Share) * Number of Shares – Total Costs

Let's break down the components used in our calculator:

• Purchase Price per Share: The amount you paid for each share of stock.
• Number of Shares: The total quantity of shares you bought and sold.
• Selling Price per Share: The amount you received for each share when you sold it.
• Commission Fee (%): The percentage charged by your broker for executing buy and sell orders. This is applied to both the purchase and selling amounts.
• Other Costs ($): Any additional fixed fees, taxes, or charges associated with the trade (e.g., trading platform fees, regulatory fees).

Detailed Calculation Steps:

Our calculator performs the following steps:

1. Calculate Total Purchase Cost:

(Purchase Price per Share * Number of Shares) + (Purchase Price per Share * Number of Shares * Commission Fee / 100)

2. Calculate Total Selling Revenue:

(Selling Price per Share * Number of Shares) – (Selling Price per Share * Number of Shares * Commission Fee / 100)

3. Calculate Net Profit/Loss:

Total Selling Revenue – Total Purchase Cost – Other Costs

Example Calculation:

Let's say you:

• Bought 100 shares at $50.25 per share.
• Your broker charges a 0.5% commission fee.
• You incurred $10.00 in other costs (e.g., platform fees).
• You sold all 100 shares at $75.50 per share.

Using the calculator:

• Purchase Price per Share: $50.25
• Number of Shares: 100
• Selling Price per Share: $75.50
• Commission Fee: 0.5%
• Other Costs: $10.00

Calculations:

• Total Purchase Cost = (50.25 * 100) + (50.25 * 100 * 0.5 / 100) = 5025 + 25.125 = $5,050.13
• Total Selling Revenue = (75.50 * 100) – (75.50 * 100 * 0.5 / 100) = 7550 – 37.75 = $7,512.25
• Net Profit/Loss = 7512.25 – 5050.13 – 10.00 = $2,452.12

In this scenario, you would have made a net profit of $2,452.12.

When to Use This Calculator:

• Evaluating the profitability of a past stock trade.
• Estimating potential profit before executing a trade.
• Comparing the costs and returns of different investment strategies.
• Understanding the impact of trading fees on overall returns.

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