Profit, loss and return on a single trade
This calculator takes the three numbers you actually have after a trade — what you paid, what you sold for, and how many shares — and returns both the money made and the percentage return. The two answer different questions and people routinely confuse them.
The two formulas
The first tells you what landed in the account. The second tells you how hard the money worked, which is the only figure that lets you compare a $200 trade against a $20,000 one.
Worked example: 100 shares bought at $50, sold at $65
- Invested: 100 × $50 = $5,000
- Proceeds: 100 × $65 = $6,500
- Profit: $1,500
- Return: 1,500 ÷ 5,000 = 30%
A 30% return is excellent. A $1,500 profit may or may not be, depending on how long the money was tied up and how much risk carried it.
Why the holding period changes the verdict
30% earned in three months is an annualised 175%. The same 30% earned over five years is 5.4% a year, which barely beats a savings account.
| Held for | Total return | Annualised |
|---|---|---|
| 3 months | 30% | ~186% |
| 1 year | 30% | 30.0% |
| 3 years | 30% | 9.1% |
| 5 years | 30% | 5.4% |
Any return quoted without a time period is incomplete. Convert to an annual figure before comparing anything.
What comes off before you keep it
The $1,500 above is gross. Two things reduce it:
- Commission on both legs. At $5 a side that is $10, leaving $1,490
- Capital gains tax. At a 15% long-term rate that is $224, leaving roughly $1,266
The realised return is closer to 25% than 30%. On short-term trades taxed as ordinary income the gap is wider still.
What this calculator leaves out
Dividends received while holding, currency movement on foreign shares, and the cost of any position that lost money. A single winning trade says nothing about the portfolio it sits in.
Position size is the missing input
The calculator asks what you bought and sold, not what fraction of your portfolio the trade represented. That fraction decides whether a 30% gain is meaningful.
A 30% return on 2% of a portfolio adds 0.6% overall. The same 30% on a 40% position adds 12% — and would have removed 12% had it gone the other way. Before judging any trade by its return, check what it was worth as a share of the whole.
Two trades, same profit, different quality
Trade A: 100 shares at $50, sold at $65. Profit $1,500 on $5,000 committed, a 30% return.
Trade B: 1,000 shares at $20, sold at $21.50. The same $1,500 profit, but on $20,000 committed — a 7.5% return.
The account statement shows an identical figure. The second trade tied up four times the capital and carried four times the exposure to a bad day. This is the entire reason to look at the percentage alongside the money, and the reason experienced traders quote returns rather than amounts.
Related calculators
- Annualised return calculator — converts this figure into a comparable yearly rate
- Stock average calculator — your true cost per share after several buys
- Capital gains yield calculator — price growth separated from dividends