Definition
The percentage return on investment (ROI) for a specific trade.

Formulas

• Stocks, Crypto, Futures, Futures Options, Equity Options
• Return % = (Profit or Loss on Trade / Initial Investment on Trade) * 100

Forex

• Return % = (Profit or Loss on Trade / Account Balance Prior to Trade) * 100

Example

• Stocks
  • You invest $1000 in a stock and sell it for $1200.
  • Your Return % = ($200 / $1000) * 100 = 20%
• Forex
  • Your account balance is $5000. You open a trade and make a profit of $250.
  • Your Return % = ($250 / $5000) * 100 = 5%

Considerations

• Investment vs. Account Balance: The calculation method differs based on the asset class.
• Gross Return: This metric represents the return before factoring in commissions, fees, and swaps.