Stock Profit Calculator

In this article, we’ll show you how to calculate stock profit. We’ll also help you get familiar with the MarketBeat stock profit calculator, a free tool we offer to help investors calculate stock profit. 

Terminology on our Stock Profit Calculator 

The MarketBeat stock profit calculator offers a useful tool to calculate gains or losses from a stock transaction. The tool takes the guesswork out of answering the question of how to calculate share profit and includes the following variables: 

• Buy price: The buy price refers to the price that you pay for your shares. If you buy shares at different times, this is the average price per share. 
• Sell price: The sell price is the price at which you sell your shares.
• Buy commission: The commission is the flat fee or percentage that your trading platform charges you when you purchase shares.
• Sell commission: The sell commission is the flat fee or percentage charged by your trading platform when you sell shares.
• Number of shares: “Number of shares” refers to the numerical value of all the shares you plan to sell.

How to Calculate Stock Profit

As we mentioned above, you can calculate the profit that you make on a stock by subtracting the price that you pay for the stock (including commissions) by the price that you sell it (minus commissions). You can calculate stock profit using a few easy steps using a share profit calculator, outlined below.

Step 1: Enter the stock ticker (optional).

Enter a stock ticker (e.g. AAPL, AMZN, WMT, etc.) in the field labeled “Choose a Stock to Populate Sell Price.” When you do this, the MarketBeat stock market profit calculator will automatically enter the current sell price for the selected ticker.  

Step 2: Enter the buy price.

This is the price that you pay for your shares. If you purchased the stock on several occasions over a period of time, enter your average cost. Many trading platforms provide this information for investors. It appears on the page that shows your activity for a particular stock. 

Step 3: Enter the sell price. 

If you enter a ticker in the “Choose a Stock to Populate Sell Price” field, this will populate automatically. If not, you can enter the sell price here. Keep in mind that when using this calculator during a trading session, the stock price will likely move. Volatile stocks may have larger price swings than other stocks. 

Step 4: Enter the buy commission.

If you’re using a platform that offers commission-free trading, enter 0% in this field. Otherwise, enter the commission you pay when you buy a stock. If your broker charges commission, this will be in the form of a percentage. If your brokerage charges a flat fee, you’ll enter in a dollar amount. 

Step 4: Enter the sell commission.

The same is true when entering the sell commission. If you use a platform that offers commission-free trading, enter 0% in this field. Otherwise, enter the commission that your brokerage charges when you sell a stock. As a commission, it will come in the form of a percentage. As a flat fee, it will come in the form of a dollar amount. 

Step 5: Enter the number of shares owned.

Finally, enter the amount of shares you will sell. You can enter fractional shares. 

Example of How to Calculate Share Profit

Let’s put this all together using a fictional example of how to calculate share profit:

On November 6, 2020, Mary sees that shares of Tesla (NASDAQ: TSLA) trade for $143.32 a share. The general election just ended and she believes that the incoming Biden administration will enact policies more favorable to electric vehicles. Mary buys 100 shares of TSLA stock, believing the stock will go higher. The trading platform she uses charges a 2% commission for buying the stock.

One year later, on November 5, 2021, TSLA stock trades for $407.36. There are indications that growth stocks will drop significantly. Mary still believes in the long-term outlook for TSLA stock, but decides she should cut her position in half. She executes an order to sell 50 Tesla shares at the $407.36 price. She also pays a 2% commission on this transaction.

She’ll calculate her share profit using the following steps:

1. Multiply the current stock price by 50 (the number of shares sold): $407.36 x 50﹦$20,368. 
2. Multiply that number by .02 (the selling commission): $20,368 x .02﹦$407.36.
3. Subtract the two numbers: $20,368 - $407.36﹦$19,960.64.

This is how much Mary would receive from the sale. Calculating the profit requires four additional steps:

1. She’d multiply the price she bought the stock for by 50 (the number of shares being sold): $143.32 x 50﹦$7,166.
2. Then, she’d multiply that number by .02 (the buying commission): $7,166 x .02﹦$143.32.
3. Next, she would add the buying commission to the purchase price: $7,166.02 + $143.32﹦$7,309.34.
4. Finally, Mary would subtract the smaller number in step six from the larger number in step three: $19,960.64 - $7,309.94﹦$12,651.32.

How to Evaluate Share Profit

Making a profit on a stock involves buying it at the right price. Most investors understand the logic behind buying low and selling high. However, making a profit also requires knowing if and when to sell a stock at a profit.

Knowing when to sell a stock when it’s at a profit is more of an art than a science. If you’re a long-term investor, you may believe that you just buy and hold. In this case, you wouldn’t think of selling a stock that generates a profit unless you need the money for other reasons. 

There are times when every investor has to question the price action that takes place with a stock. The stock price may rise to a point where taking some profit just makes sense. This doesn’t mean you have to sell your entire position. However, there may be times when it’s a good idea to take some of that excess profit off the table, such as in the following circumstances:

• The reason for owning the stock has changed: There should be a purpose for every stock in your portfolio. The company may be a sector leader or it may offer a product or service that has little or no competition. Maybe it has a rock-solid dividend. If the reason changes, institutional investors may start to reconsider how much of that company’s stock they should own and you should do the same.
• The stock price rises dramatically: When you buy a stock that sells at a discount, it’s not unusual to see a 10% gain, even in a bear market. If the stock starts to rise 20% or higher in a short period of time and that gain is not supported by its underlying fundamentals, it may indicate that the stock is overbought. For example, a stock with a lot of short interest on it could be undergoing a short squeeze. In many cases, this doesn’t mean liquidating an entire position, but it may mean you look at how much weight that stock carries in your portfolio. A large run-up in price could mean that a stock that was once 20% of your portfolio is now 50% or higher. Taking a little profit will protect your portfolio from the downside risk of that stock moving lower. 
• The stock price has hit an investor’s price target: “If you don’t know where you’re going, any road will get you there” applies in this situation. Many investors consider a price to buy a stock and a price target to sell. However, a good guide may include the consensus analyst’s forecast for a stock. If the stock begins to exceed that by a certain percentage, that could be the price target to trigger a selling action. Setting a price target also provides discipline and structure to your investing routine because it’s easy to allow emotion to govern your investment decisions. In this case, greed can come from believing that a stock will continue to move higher, even when logic says it won’t. 
• The stock hits a technical indicator: Investors that practice technical analysis have many different indicators they may look at in place of a stock gain loss calculator. However, take a look at the stock’s one-year high. If a stock struggles to break above its 52-week high, it may be a sign of resistance. That gives investors an idea that if the stock does push past that point, the rally may be short lived. This can help set a price target as well. 
• When the underlying company is performing poorly: A company’s earnings report can be a gold mine of information. Not only does it give you a report card on how a company performed financially during a particular quarter, but in many cases a company provides guidance for how they see the remainder of the year going. If it appears that the company will weather several rough quarters, it may be time to take some profit on the stock. 
• When the market or sector is performing poorly: While it’s nice to own best-in-class stocks, there are times when you own the nicest house on a bad street. Cyclical stocks such as oil and gas stocks or semiconductors are not bad long-term plays, especially those that pay dividends. If the sector projects a downturn, it’s a good idea to take some profit and wait for a buying opportunity. 

Knowing How to Calculate Stock Profit Provides Peace of Mind 

The goal of investing is to buy low and sell high, but there are times when a stock has hit a high that won’t continue. In cases like these, it may be necessary to take some profit in order to ensure you take advantage of a rare opportunity. 

Knowing how to calculate stock profit requires knowing the price paid for a stock, the commission fee and the sales price. The MarketBeat stock profit calculator is a free tool we offer investors that makes it easy to calculate stock profit. 

Did you like our MarketBeat stock price profit calculator? Check out our other calculators to help you make great investing and trading decisions: 

MarketBeat Dividend Calculator

MarketBeat Retirement Calculator

MarketBeat Dividend Yield Calculator