Stock Math FAQs
The questions that actually come up — profit and ROI, the average-cost method, fees and break-even, sizing, DRIP, CAGR, and how this calculator rounds. Every answer matches what the tools do.
All questions
How do I calculate stock profit?
Profit = (sell − buy) × shares − commissions on both sides. 100 shares from $50 to $65 with $5 fees each way: (65 − 50) × 100 − 10 = $1,490. The stock profit calculator is this formula with live inputs; the full calculator extends it to any sequence of buys and sells.
How does average cost basis work — and which method does this site use?
Average cost = total cost of shares held (including buy fees) ÷ shares held. This site applies it sequentially: buys raise the total, sells remove shares at the running average — the average-cost method. Brokers may instead track individual lots (FIFO/LIFO), which changes realized-gain figures; this tool states its method rather than silently picking one for your taxes. Background in the average-cost article.
What does the break-even price include?
Share cost, buy commissions, and the sell commission you'd pay to exit — (cost + fees) ÷ shares for flat fees, cost ÷ (shares × (1 − f%)) for percentage fees. It always sits above your average cost. The break-even calculator computes it standalone and shows the rise needed to cover costs.
How are commissions applied — flat versus percentage?
Each side has its own fee, either a flat amount per trade ($5 every buy) or a percentage of that trade's value (0.1% of shares × price). Flat fees hit small trades hardest — $5 on a $500 buy is 1% gone at the door; percentage fees scale with size. Both are applied per matching trade row, and both flow into invested capital, realized P/L, and break-even.
What is the difference between ROI and total return?
On this site, ROI = total P/L ÷ total invested × 100, where invested includes buy fees — one number for how hard the money worked, ignoring time. Total return in fund literature usually also folds in dividends and assumes reinvestment. Neither is annualized: for comparing results over different periods, use CAGR.
Why does a 50% loss need a 100% gain to recover?
The gain applies to the smaller base: $200 dropping 50% leaves $100, and doubling $100 merely restores $200. Required gain = loss ÷ (1 − loss), so −20% needs +25% and −95% needs +1,900%. The recovery table lists the curve; our sibling site covers the pure-percentage version of the same asymmetry at percentage-calculator.io.
What does the target-average solver do?
It inverts the averaging question: instead of "what's my average after this buy?", it answers "how many shares reach the average I want?" — n = S·(a − c) ÷ (p − a) for S shares at average c with the price at p. The target must lie between the price and your current average. It lives on the stock average calculator.
How does position sizing and the 1% rule work?
Choose the loss first: risk$ = account × 1%. Divide by the per-share risk (entry − stop) to get the share count — a $10,000 account risking 1% on a $50 entry with a $48 stop buys 50 shares. The point is survival: small fixed risks mean no single trade, or losing streak, ends the account. Tool: position size calculator.
What does a risk/reward ratio actually tell me?
Only a claim, made precise. A 3:1 ratio (risk $2 to target $6) breaks even at a 25% win rate — risk ÷ (risk + reward). Whether 3:1 is "good" depends entirely on how often that target really gets hit, which no calculator knows. The risk/reward calculator states the implied win rate so the claim is at least visible. No ratio is a recommendation.
What is DRIP (dividend reinvestment)?
Using each dividend payment to buy more shares instead of taking cash — so next year's dividends are paid on a bigger share count, and the position compounds. The dividend calculator models it annually and prints the year-by-year table; with zero growth assumptions it reduces exactly to compound interest at the yield.
What is CAGR, and why is it lower than my average return?
CAGR = (end ÷ start)^(1/years) − 1 — the single smooth rate that turns your start into your end. It is always at or below the arithmetic average of yearly returns, because volatility drags compounding: +50% then −50% averages 0% but leaves you at −25%. The CAGR calculator solves any of the four variables from the other three.
Does the currency selector convert amounts?
No. It formats — $, HK$, €, ¥, CN¥, £, ₿, each with its own decimal convention (yen show no decimals, bitcoin up to eight) — and never converts, because conversion would need live exchange rates and this site fetches no market data by design. Your figures mean whatever currency you typed them in.
Is any of this investment advice?
No. Every page here does arithmetic on numbers you supply — nothing is personalized, predicted, or recommended, and there is no live market data anywhere. The tax field applies one illustrative rate because real capital-gains rules vary by country, holding period, and account type. For decisions with consequences, consult a licensed professional. The posture is spelled out on the about page.
Is my data private?
Your numbers never leave your browser — the math runs locally, there are no accounts, and the site currently loads no analytics at all. Two small preferences (theme, decimal precision, plus your currency choice) live in your browser's storage. The "Copy link" button encodes values into a URL only when you press it. Details in the privacy policy.
How accurate are the results — how does rounding work?
The engines compute with exact rational arithmetic (no binary floating point), and each result is rounded exactly once, at display, half away from zero: currency amounts to their currency's convention, percentages to your chosen precision (the .0← / .00→ buttons, 0–8 places). The one documented exception is CAGR's irrational root, computed in float64 far below display precision. Full methodology on the about page.