Investing in the stock market allows you to generate passive income: Once the money is invested, you get to share in the profits or losses of the company without having to lift another finger. Though investing for the long term is usually recommended, it can be fun to measure your daily gains — or not so much fun to measure your daily losses — especially after a particularly good or bad day for the market.
Video of the Day
Daily Stock Return Formula
To calculate how much you gained or lost per day for a stock, subtract the opening price from the closing price. Then, multiply the result by the number of shares you own in the company. For example, say you own 100 shares of a stock that opened the day at $20 and ended the day at $21. Subtract $20 from $21 to find each share increased in value by $1. Then, multiply the gain of $1 per share by 100 because you own 100 shares to find your total return for your position in that company is $100 for the day. Alternatively, if the stock started at $20 and ended at $19, subtract $20 from $19 to get negative $1, meaning you lost $1 for each share you owned. Multiplied by 100 shares, your loss for the day is $100.
If you have multiple stocks, repeat the process for each stock in your portfolio, and then add the results together to figure your overall gain or loss for the day.
Converting Daily Returns to a Percentage
If the price of your stock goes up $1 for the day, it's certainly better than taking a loss for the day. But, that $1 price jump looks a lot better if the stock started the day worth $20 than if the stock started the day worth $800. That's because if you could get the same return, it's much better to invest $800 into 40 shares of the $20 stock that each went up $1 than one share of the $800 stock.
To make an accurate comparison of daily stock returns for stocks of different prices, divide the daily stock return by the original price, and then multiply the result by 100. For example, divide the $1 gain by the $20 original price to get 0.05, and then multiply by 100 to find that the stock's daily return was 5 percent. If the price was $800 to start, divide $1 by $800 to get 0.00125, and then multiply by 100 to get 0.125 percent as the daily return.