Definition
The percentage return (before commissions, fees, and swap) realized on each partial exit within a larger trade.
Formulas
Stocks, Crypto, Futures, Futures Options, Equity Options:
Partial Return % = ((Exit Price – Average Entry Price for Closed Shares/Contracts) / Average Entry Price for Closed Shares/Contracts) * 100
Forex
Partial Return % = ((Exit Price – Average Entry Price for Closed Shares/Contracts) * Number of Shares/Contracts Exited / Account Balance Prior to Trade) * 100
Example (Stocks)
Trade: Buy 100 shares of XYZ at $25.
Partial Exits:
Sell 40 shares at $30
Account Balance Prior to Trade (Forex): $10,000
Partial Return % (Stocks): (($30 – $25) / $25) * 100 = 20%
Partial Return % (Forex): (($30 – $25) * 40 / $10,000) * 100 = 2%
Considerations
-
- Asset Class: Calculation differs for forex vs. other asset classes.
- Gross Return: Represents return before commissions, fees, and swap.
- Accounting Method (FIFO, LIFO, etc.): Impacts the average entry price calculation.
