Net profit and ROI from a stock trade including commissions

Why Commissions Matter More Than Most People Think

A trade that looks profitable on price movement can still lose money after fees. Buying 100 shares at 20 and selling at 21 produces 100 of gross profit. With 7 commissions each side, the net profit is 86 — a 14% haircut on the apparent gain. Commission drag is largest on small trades and frequent trades. The calculator separates the commission line so you can see how much of your gross return actually reached your account.

How ROI Differs From Dollar Profit

A 1,000 profit on a 10,000 investment is 10% ROI. A 1,000 profit on a 100,000 investment is 1% ROI. Dollar profit feels good but misses capital efficiency. ROI normalises for position size so you can compare trades honestly. An investor making 500 ten times on 5,000 positions (50 trades) has made 5,000 on 25,000 of capital cycled — same as a single 100,000 trade producing 5,000 (5% ROI). Different risk profile; same net dollar outcome.

What Counts as a Commission

Direct brokerage commission (many brokers charge 0 for stock trades; options and international still cost 0.65-15). Spread costs — the gap between bid and ask, usually invisible but real. the financial regulator and the financial regulator fees (small, sub-0.05 per share). Currency conversion on international trades (often 0.5-1.5%). Platform subscription fees allocated per trade. Enter the all-in cost per side, not just the headline commission, for honest profit calculation.

Taxes Are Separate

This calculator shows pre-tax profit. Short-term capital gains (held under 1 year in) are taxed at ordinary income rates. Long-term gains (held 1 year+ in) get preferential rates (0/15/20%). Capital gains: 10% standard rate, 20% upper rate above the annual allowance. held over 12 months qualifies for 50% CGT discount. Take the pre-tax profit number here and apply your jurisdiction's capital gains rate separately for after-tax proceeds.

Worked Example

Bought 500 shares at 45, sold at 52.50, 10 commission each side. Total invested: 45 × 500 + 10 = 22,510. Total received: 52.50 × 500 - 10 = 26,240. Net profit: 3,730. ROI: 16.6%. Per-share change: 7.50 (16.7% price gain before commissions). Total commissions: 20. In this case commissions only took 0.5% of the gross profit because the position was large. On a smaller position — say 20 shares — the same 20 of commissions would have eaten 6-7% of gross profit.

Multi-Trade Position Adjustments

If you added to a position over multiple buys, calculate the average buy price across the lot: (shares_1 × price_1 + shares_2 × price_2 +.) / total_shares. Use that weighted average as the buy price input. Partial sells also complicate — for tax purposes, most jurisdictions default to FIFO (first-in, first-out) accounting, but you can specify LIFO or specific lots. The calculator shows total trade profit; for per-lot or FIFO-specific calculations, run multiple times with each lot separately.

What This Number Does Not Tell You

Opportunity cost. A 16% ROI sounds good until you compare against what the same capital would have earned in an index fund over the same period. If the broad market returned 12% during your holding period, your active pick added 4 percentage points of alpha — reasonable but not extraordinary. If the market returned 20%, your pick actually underperformed passive by 4 points despite being profitable. Always benchmark trade-by-trade returns against simple index alternatives to see whether stock picking adds real value over the long haul.