Showing posts with label total. Show all posts
Showing posts with label total. Show all posts
Sunday, August 30, 2015
How to Calculate Stock Gain
Compute the cost basis for the stock trade. Cost basis consists of the original (purchase) price of the stock plus all fees and commissions paid for the purchase and sale of the stock. For example, if you bought 100 shares of a stock at $10/share ($1,000) and paid fees of $10 when you bought the stock and $12 to sell it, your cost basis is $1,000 plus $10 plus $12 for a total of $1,022.
Calculate the total proceeds. Your total proceeds include the money received from selling the stock plus the cash value of dividends received while you owned the shares. For instance, if you sold the 100 shares from Step 1 for $15/share ($1,500) and received a total of $50 in dividend income during the time you held the shares, your total proceeds are $1,500 plus $50, or $1,550.
Calculate stock gain or loss. Subtract the cost basis from total proceeds. If your cost basis is $1,022 (Step 1) and total proceeds are $1,550 (Step 2) your stock gain is $1,550 minus $1,022, which equals $528. If you get a negative number (meaning the cost basis is greater than total proceeds) you had a loss rather than a gain.
Figure your percentage gain or loss. It’s usually most useful to compare percentage gain or loss to see how well different investments have done. To convert stock gain into percentage stock gain, divide the stock gain by the cost basis and multiply by 100. In the example above, you would divide $528 (stock gain) by $1,022 (cost basis) and multiply the result by 100 to get a percentage stock gain of 51.7 percent.
Friday, August 28, 2015
How to Calculate Stock Basis for Exercised Options
Receive notification from your brokerage that an option has been exercised. This will most likely come in the form of a trade confirmation the day after option expiration. If an option is 'In-The-Money' by even one cent, the option will be exercised.
Determine your initial cost in the stock. This will be the share price you paid to buy the stock for the first time.
Adjust your cost basis by calculating the total option premiums you have collected against the stock. Keep in mind that options which expired previously without being exercised also reduce your basis in the stock.For example, let's say you bought 100 shares of XYZ in January for $10 per share. You then sold the February $12.50 call option and collected a $1 premium, lowering your basis in the stock to $9 per share. On option expiration day in February, the stock is $11 per share, so the option expires worthless. You decide to sell a March $12.50 call, and this time you collect a $2 premium, lowering your overall basis to $7 per share.
Calculate your profit or loss. If an call option is exercised at a strike price higher than your basis in the stock, you have made a profit. To calculate the profit, you must subtract your basis in the stock from the strike price of the option.To use our earlier example, on option expiration day in March the stock is $13 per share. The option you sold is exercised at its strike price ($12.50). Your basis in the stock is $7. Therefore, $12.50-$7=$5.50 profit per share on the trade.If an option is exercised at a strike price below your cost basis, you have a loss. To calculate the loss, subtract the strike price from your basis in the stock.
Calculate your tax basis. For tax purposes, your basis in a stock also includes all the commissions and fees you incurred during the trade. The easy way to calculate that is to add up all the commissions and fees and divide the total by the number of shares you own.
Thursday, August 20, 2015
How to Calculate Stock Value Per Share
Find the total value of your stock. Many brokerage screens will give the total value of the money you have invested in a certain stock. For example, say that you have $10,000 invested in Company X.
Find the total number of shares you own for that company. For example, say you own 250 shares of Company X.
Divide the total value of the stock, by the total number of shares. Using the example, the equation reads:Value of Stock / Number of Shares = Price per Share$10,000 / 250 = $40 per share.
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