Why a 20% price rise isn't a 20% profit

When a share you own goes up 20%, it's natural to think you're 20% up. You aren't, because you paid fees to buy it and you'll pay fees again to sell it. Those fees have to be covered before any profit is yours.

A worked example

Say you buy 125 MTN Ghana shares at GHS 6.50 through IC Securities.

If the price rises 20% to GHS 7.80 and you sell, the sale is GHS 975.00 and the fees on it are GHS 21.93, so you receive GHS 953.07. That's a profit of GHS 122.29, or 14.7%, not 20%.

To walk away with a true 20% profit (GHS 996.94 or more), the price has to reach GHS 8.16. That's a 25.5% rise from what you paid.

Your break-even is above what you paid

The same thing happens at the bottom. To get back exactly what you put in, the sale also has to pay its own fees, so the price has to reach GHS 6.80 before you stop losing money: 4.6% above the GHS 6.50 you paid. That price is your break-even.

What Breakeven does

Breakeven works this out for every holding you track, using the fees your broker actually charges, and keeps it up to date as you buy and sell. It also shows the price you'd need for any profit you choose, and can email you when the close reaches it.