Q: How do you calculate stock return percentage (ROI)?

ROI = (Net Profit ÷ Initial Investment) × 100. Example: Invest $5,000, sell for $6,000, $20 fees, $147 tax, net $833 profit. ROI = ($833 ÷ $5,000) × 100 = 16.7%. This shows efficiency of the trade. A $100 profit on $1,000 invested (10% ROI) is better than $100 profit on $5,000 invested (2% ROI) - the first used capital more efficiently.

Q: What is a good stock return percentage?

The S&P 500 averages about 10% annually long-term, so beating that is good. Day/swing traders target 1-2% per trade but make many trades. Long-term investors are happy with 8-15% annually. A 20%+ return in under a year is excellent. However, consistency matters more than individual big wins - consistently making 1-2% monthly beats occasionally making 50% then losing 30%. Factor in risk and time invested.

Q: When should I sell a stock for profit?

Common strategies: 1) Set profit target (e.g., sell at 20% gain), 2) Use trailing stop-loss (e.g., sell if drops 10% from peak), 3) Sell when fundamentals change, 4) Hold long-term (years) for compounding. Avoid emotional selling. Taking 10-20% profits consistently often beats holding for bigger gains that may never come. Use our calculator to model your exact profit at different sell prices before deciding.

Q: How do trading fees affect small vs large trades?

Fees hurt small trades more. A $10 commission on a $500 trade is 2% - you need 2% gain just to break even. The same $10 on a $10,000 trade is 0.1%. This is why day traders need $0 commission brokers and why experts say don't invest amounts under $1,000 if paying commissions. With $0 commissions, small trades become viable, democratizing trading.

Q: Can you deduct stock losses on taxes?

Yes! Capital losses offset capital gains dollar-for-dollar. If you have $10,000 in gains and $4,000 in losses, you only pay tax on $6,000 net gain. You can also deduct up to $3,000 in net losses against ordinary income per year. Unused losses carry forward indefinitely. This is "tax-loss harvesting" - selling losers to offset winners. Always keep records of all trades for tax reporting.

Q: What is the break-even price for a stock trade?

Break-even is the sell price where you neither profit nor lose after all costs. Formula: Break-even = (Buy Price × Shares + All Fees) ÷ Shares. Example: Buy 100 shares at $50 with $10 buy commission = $5,010 total. Need to sell at $50.10 + $10 sell fee = $50.20 break-even. Must sell above $50.20 to profit. Factor this in when setting targets - your buy price isn't your break-even.

Question 1

How do you calculate stock profit or loss?

Accepted Answer

Stock profit = (Sell Price - Buy Price) × Number of Shares - Trading Fees. For example, buying 100 shares at $50 and selling at $60: ($60 - $50) × 100 = $1,000 gross profit. Subtract $20 in commissions = $980. Then subtract capital gains tax for net profit. Always include ALL costs - commissions, exchange fees, and taxes - for accurate profit calculation.

Question 2

What is the difference between gross and net profit?

Accepted Answer

Gross profit is the price difference (sell - buy) before any costs. Net profit is what you actually keep after commissions, fees, and taxes. Example: $1,000 gross profit - $20 fees - $147 taxes (15%) = $833 net profit. Net profit is your real gain. Many traders mistakenly calculate gross and are disappointed by actual returns. Always plan using net profit.

Question 3

How much are stock trading commissions and fees?

Accepted Answer

Major brokers like Fidelity, Schwab, Robinhood, and Webull now offer $0 commissions on stock trades. However, some still charge: $5-10 per trade, $0.005-0.01 per share for active traders, or foreign transaction fees. Options trades typically cost $0.50-0.65 per contract. Mutual funds may charge $50+ per trade. Also consider SEC fees (~$5 per $1M sold) and potential margin interest.

Question 4

What is capital gains tax on stocks?

Accepted Answer

Short-term capital gains (held <1 year) are taxed as ordinary income at your tax bracket (10-37%). Long-term gains (held 1+ year) are taxed at preferential rates: 0% (low income), 15% (most people), or 20% (high income). Example: $10,000 profit held 6 months = $2,400 tax at 24%. Same profit held 13 months = $1,500 tax at 15%. Holding 1+ year saves significant tax.

Question 5

How do you calculate stock return percentage (ROI)?

Accepted Answer

ROI = (Net Profit ÷ Initial Investment) × 100. Example: Invest $5,000, sell for $6,000, $20 fees, $147 tax, net $833 profit. ROI = ($833 ÷ $5,000) × 100 = 16.7%. This shows efficiency of the trade. A $100 profit on $1,000 invested (10% ROI) is better than $100 profit on $5,000 invested (2% ROI) - the first used capital more efficiently.

Question 6

What is a good stock return percentage?

Accepted Answer

The S&P 500 averages about 10% annually long-term, so beating that is good. Day/swing traders target 1-2% per trade but make many trades. Long-term investors are happy with 8-15% annually. A 20%+ return in under a year is excellent. However, consistency matters more than individual big wins - consistently making 1-2% monthly beats occasionally making 50% then losing 30%. Factor in risk and time invested.

Question 7

When should I sell a stock for profit?

Accepted Answer

Common strategies: 1) Set profit target (e.g., sell at 20% gain), 2) Use trailing stop-loss (e.g., sell if drops 10% from peak), 3) Sell when fundamentals change, 4) Hold long-term (years) for compounding. Avoid emotional selling. Taking 10-20% profits consistently often beats holding for bigger gains that may never come. Use our calculator to model your exact profit at different sell prices before deciding.

Question 8

How do trading fees affect small vs large trades?

Accepted Answer

Fees hurt small trades more. A $10 commission on a $500 trade is 2% - you need 2% gain just to break even. The same $10 on a $10,000 trade is 0.1%. This is why day traders need $0 commission brokers and why experts say don't invest amounts under $1,000 if paying commissions. With $0 commissions, small trades become viable, democratizing trading.

Question 9

Can you deduct stock losses on taxes?

Accepted Answer

Yes! Capital losses offset capital gains dollar-for-dollar. If you have $10,000 in gains and $4,000 in losses, you only pay tax on $6,000 net gain. You can also deduct up to $3,000 in net losses against ordinary income per year. Unused losses carry forward indefinitely. This is "tax-loss harvesting" - selling losers to offset winners. Always keep records of all trades for tax reporting.

Question 10

What is the break-even price for a stock trade?

Accepted Answer

Break-even is the sell price where you neither profit nor lose after all costs. Formula: Break-even = (Buy Price × Shares + All Fees) ÷ Shares. Example: Buy 100 shares at $50 with $10 buy commission = $5,010 total. Need to sell at $50.10 + $10 sell fee = $50.20 break-even. Must sell above $50.20 to profit. Factor this in when setting targets - your buy price isn't your break-even.

Question 11

What is the difference between short-term and long-term capital gains tax?

Accepted Answer

Short-term capital gains (assets held ≤1 year) are taxed as ordinary income at your tax bracket (10-37%, typically 22% for middle income). Long-term gains (held >1 year) get preferential rates: 0%, 15%, or 20% depending on income. Example: $10,000 profit held 11 months = $2,200 tax at 22% rate. Same profit held 13 months = $1,500 tax at 15% rate. Holding just 2 months longer saves $700 (32% tax savings). This is why buy-and-hold investing is tax-advantaged.

Question 12

What is the wash sale rule and how does it affect stock losses?

Accepted Answer

The wash sale rule prevents you from claiming a tax deduction if you sell a stock at a loss and buy the same or "substantially identical" stock within 30 days before or after the sale (61-day window total). Example: Sell Stock A at $1,000 loss on Dec 15, buy it back Dec 20 = wash sale, can't deduct the $1,000 loss in current year. The loss gets added to the cost basis of the new purchase instead. To avoid: Wait 31+ days before repurchasing, or buy a similar but different stock (e.g., sell Apple, buy Microsoft).

Question 13

How are dividends taxed differently from capital gains?

Accepted Answer

Qualified dividends (from stocks held 60+ days) are taxed at long-term capital gains rates (0%, 15%, or 20%) - same favorable treatment. Non-qualified dividends are taxed as ordinary income (10-37%). Example: $1,000 qualified dividend = $150 tax at 15% rate. $1,000 non-qualified = $220 at 22% rate. Dividends from REITs, money market funds, and stocks held <60 days are typically non-qualified. Most dividends from US corporations held long-term are qualified. This tax advantage makes dividend stocks attractive for long-term portfolios.

Stock Profit Calculator

About this tool

Usage examples

Profitable Stock Trade

Day Trading with Multiple Trades

Long-Term Investment Gains

Loss Scenario

Impact of High Commission Fees

How to use

Benefits

FAQs