Stock Profit Calculator

Realised profit on a completed round trip is sale proceeds net of selling costs minus the cost basis, where the basis is the purchase price times shares plus the buying commission. Because the fee is charged on both legs, a fixed per-trade commission is deducted twice, once added to what was paid and once subtracted from what was received. The percentage return divides that profit by total buy cost rather than by the raw price paid, so the commission is correctly treated as capital committed. Break-even is the sell price at which proceeds exactly cover basis plus the exit fee, which is always above the purchase price and, on small positions, meaningfully so: a 9.99 dollar commission on each side of a ten-share trade at 50 dollars requires roughly a 4 percent price gain simply to get back to level, while the same fees on 1000 shares amount to 0.04 percent. The calculation deliberately excludes time and tax, both of which change the interpretation. A 50 percent gain earned in six months and one earned over ten years are the same number here but annualise to about 125 percent and 4.1 percent respectively, so raw return is only comparable across trades of similar duration. In the United States a position sold within one year is taxed as a short-term gain at ordinary income rates of up to 37 percent, while a holding period beyond one year qualifies for long-term rates of 0, 15, or 20 percent, with an additional 3.8 percent net investment income tax on higher earners. Regulatory transaction fees, currency conversion, and bid-ask spread are also outside the model, and on illiquid stocks the spread frequently exceeds any explicit commission.

The commission input on this calculator exists because brokerage pricing in the United States was fixed by cartel for almost two centuries. The Buttonwood Agreement of 1792, signed by twenty-four brokers in New York, committed its members to a minimum rate, and that principle survived into the New York Stock Exchange constitution, where minimum commission schedules remained binding until the Securities and Exchange Commission ordered them abolished. Deregulation took effect on 1 May 1975, a date the industry still calls May Day, and rates for large institutional orders fell immediately. Discount brokerage grew directly out of that change, with Charles Schwab among the firms that repriced retail execution without research or advice attached. Costs fell again with electronic order entry and internet brokerage in the mid-1990s, when advertised rates dropped from tens of dollars per trade toward single digits. Decimalisation, completed across United States equity markets in April 2001, replaced pricing in sixteenths of a dollar with penny increments and narrowed quoted spreads, cutting an implicit trading cost that had often exceeded the visible commission. The final step came in October 2019, when Charles Schwab, TD Ameritrade, E-Trade, and Fidelity moved to zero commissions on United States listed stocks within days of each other, following pressure from newer app-based brokers. Explicit commissions persist for options contracts, broker-assisted orders, and many international markets, which is why the field remains adjustable here.