Free calculator
Short Selling Profit Calculator
Enter the shares you are shorting, the prices in and out, and the borrow rate. This shows the gross and net result, the true breakeven, the margin your broker ties up and the loss if the stock runs against you.
Net profit or loss
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Enter your numbers to calculate.
- Short sale proceeds
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- Gross P&L on the move
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- Borrow cost
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- Dividends owed
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- Commissions
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- Margin required (150%)
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- Return on margin posted
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- Return on your own cash
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- Breakeven cover price
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- Cost of carry per day
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Borrow cost is accrued on the short sale proceeds at the annual rate you enter. Real borrow rates are quoted on the daily market value and can change without notice.
What a short trade actually costs
Selling short means borrowing shares through your broker, selling them into the market, and
buying them back later to return. The headline result is simple:
(short price - cover price) x shares. Everything else is carry, and carry is what
turns winning ideas into flat trades when the thesis takes a year to work.
Three costs attach to the borrow. The borrow fee is an annual rate accrued daily on the value of the loaned stock. Any dividend paid while you are short is debited from your account, since the lender is still entitled to it. Commissions apply on both legs. The calculator subtracts all three before it reports a result, which is why the breakeven cover price sits below your entry rather than at it.
The default trade, step by step
Short 500 shares at $60 and cover at $48, holding for 30 days with an 8% annual borrow fee.
- Proceeds:
500 x $60 = $30,000. - Gross P&L:
($60 - $48) x 500 = $6,000. - Borrow cost:
$30,000 x 0.08 x 30 / 365 = $197.26. - Net P&L:
$6,000 - $197.26 = $5,802.74. - Breakeven cover price:
$60 - $197.26 / 500 = $59.61.
Regulation T requires 150% of the short market value to be held, which is the $30,000 of proceeds plus $15,000 of your own cash, so the position ties up $45,000. Against that the trade returns 12.89%. Measured against the $15,000 of your own money it is 38.68%. The calculator reports both, because brokers quote the requirement one way and traders quote their returns the other.
Profit and loss at every cover price
The table below runs the current inputs across cover prices from 50% below your short to 100% above it. The asymmetry is the point: the gain stops at the sale proceeds when the stock reaches zero, and the loss keeps going.
| Move in the stock | Cover price | Net P&L | Return on margin |
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Sizing a short position
Because the loss grows as the position moves against you, a short that starts at 5% of the account is a bigger share of it at every step up. That is the opposite of a long position, which shrinks as it falls. Traders who size shorts by the proceeds are underestimating the risk from the first day, and the rules in risk management for traders apply with a harder ceiling here.
Check the margin side against the margin calculator, since a short sits in the same account and the same maintenance requirements govern it. The mechanics of locates, short interest, days to cover and recalls are in short selling explained, the market plumbing that decides your fill is in market makers and liquidity, and what a bad outcome costs in recovery terms is in the drawdown recovery calculator.
Frequently asked questions
How does short selling make money?
You borrow shares, sell them at the current price, and later buy them back to return to the lender. If the repurchase price is lower than the sale price, the difference is your profit, less the borrow fee, any dividends you owe and commissions.
What is a stock borrow fee?
It is the annual rate the lender charges for the loan of the shares, accrued daily on the position value. Easy to borrow names cost a fraction of a percent a year, while hard to borrow names can run past 50% and change daily without notice.
Why do I owe the dividend on a stock I am short?
The lender of the shares is still entitled to the dividend, and the company pays it to whoever holds the shares you sold. Your account is debited for the same amount on the payment date, so dividends are a direct cost of staying short.
How much margin does a short position require?
Regulation T requires 150% of the short market value, which is the sale proceeds plus 50% of the value from your own cash. Maintenance requirements then apply as the price moves, and brokers often demand more on volatile or hard to borrow names.
Why is the loss on a short unlimited?
A stock can only fall to zero, which caps the gain at the sale proceeds, but there is no ceiling on how high it can rise. A short at $60 loses $60 a share if the stock doubles and $180 a share if it quadruples, with no natural stopping point.
What is a short squeeze?
A squeeze happens when a rising price forces shorts to buy back, and that buying pushes the price higher, forcing more covering. Recalls of borrowed stock and rising margin requirements can force the exit whether or not you want to close.