How to Calculate Stock Profit

Calculating stock profit is straightforward: Profit = (Sell Price - Buy Price) × Shares - Fees. However, understanding your true return requires considering commissions, taxes, and holding period.

For example, if you buy 100 shares at $50 ($5,000 total) and sell at $60 ($6,000 total), your gross profit is $1,000. After a $10 commission each way, your net profit is $980—a 19.6% return on your $5,010 investment.

Understanding Capital Gains Tax

When you sell stock at a profit, you owe capital gains tax. The rate depends on how long you held the investment:

• Short-Term (less than 1 year): Taxed as ordinary income at your marginal rate (10-37%)
• Long-Term (1 year or more): Preferential rates of 0%, 15%, or 20% based on income

Our calculator automatically determines whether your gain is short-term or long-term based on your buy and sell dates, then estimates the tax owed.

Short Selling Explained

Short selling is betting that a stock will decline. You borrow shares, sell them at the current price, then buy them back later (hopefully cheaper) to return to the lender.

Profit on a short sale = (Sell Price - Buy Price) × Shares, where you sell first at a higher price and buy back at a lower price. Use our "Short" toggle to calculate short position profits correctly.