This is the Part 4 on the series. In this part, I will explain on how to calculate profit (or loss) and applicable fees when buying or selling shares at Bursa Malaysia.
By the end of this part, you will have the basic knowledge to enter stock market.
But the most important thing to remember is that, make sure that you are investing, not gambling in stock market.
Part 1 – How to Open Trading and CDS Account for Trading in Bursa Malaysia?
Part 2 – How to Buy and Sell Shares in Bursa Malaysia?
Part 3 – How to Determine Trading Settlement in Bursa Malaysia?
Part 4 – How to Calculate Profit, Loss and Brokerage Fees in Stock Market Trading?
In Part 3, we see that the settlement formula as follow.
Total Buy Settlement (RM) = Value of Shares + Brokerage Fees + Clearing Fees + Stamp Duty
Total Sell Settlement (RM) = Value of Shares – Brokerage Fees – Clearing Fees – Stamp Duty
Now I will show you on how calculate all the component in the formula.
Step 1 – Calculate the value of Shares
This is easy. For example if you buy or sell 1,000 units of A shares at RM5.00 then you have to pay or received RM5,000.
Step 2 – Calculate Brokerage Fees
Brokerage fees is really depends on your chosen Broker. Normally it range from 0.05% to 0.7% from contract value depending on your value of transaction, account type and trading type. However, broker normally impose minimum brokerage fees per transaction. You can check for online brokerage fees in this comparison table.
Take the same example as above, and with brokerage fees of 0.42%.
Brokerage Fees = 0.42% x RM5,000 = RM21
Step 3 – Calculate Clearing Fees
Clearing Fee is charged by Bursa as the clearing house. The fee is 0.03% from contract value or value of shares but subjected to maximum of RM1,000.00
Take the same example as above.
Clearing Fees = 0.03% x RM5,000 = RM1.50
Step 4 – Calculate Stamp Duty
Stamp duty is a charge by the Government and Broker will collect on their behalf. You have to pay RM1.00 for every RM1,000.00 of contract value or value of shares and rounded up to the nearest ringgit subject to maximum value of RM200.00
Take the same example as above.
Clearing Fees = RM5
Step 5 – Calculate Profit (or Loss)
Base on formula above we take the following example,
Buy 1,000 units of A shares at RM5.00 and sell it later at RM6.00
Shares Value when buying = RM5 x 1,000 = RM5,000
Shares Value when selling = RM6 x 1,000 = RM6,000
Buy Settlement = RM5,000 + 0.42% x RM5,000 + 0.03% x RM5,000 + RM5 = RM5,027.50
Sell Settlement = RM6,000 – 0.42% x RM6,000 – 0.03% x RM6,000 – RM6 = RM5,967.00
Net Profit = RM5,967.00 – RM5,027.50 = RM939.50
Step 6 – What is Contra?
In Part 3, we already understand that when you buy shares, you only have to pay it at T+3. What happen if you sell the shares that you bought earlier before T+3 or you pay for it?
We call this Contra. What will happen is that, your broker will calculate the different between buy and sell settlement. The different sum will be credited or debited in your trust account depending whether you are making profit or loss.
If you make profit from contra transaction, we call it Contra Gain. If otherwise we call it Contra Loss.
may i ask what is intraday?
Intraday means that you buy & sell the same stock on the same day.
is your sell settlement calculation correct? should it also subtract the clearing fees (0.03%) and the stamp duty?
You are right, it was typo error. Anyway it is corrected now.
I bought 1 share of TCS at 1033 on 3-10-2011 and later on 10-10-2011 I sold it for 1070 What is the net gain ?
Thanks for this excellence info. How can we calculate the profit in percentage term? Profit margin?
“In Part 3, we already understand that when you buy shares, you only have to pay it at T+3. What happen if you sell the shares that you bought earlier before T+3 or you pay for it?”
Meaning if sell the share in T+2, i only have to pay the loss… am i right
mansor, you only have to settle the different between the selling & buying price. Means that you will have either contra gain or loss.
Just how is the calculation of stamp duty done? Working on a formula for use in Excel right now.
I mean, if your total share cost, before adding in extra charges, is RM 1,560, do you get RM 1 or RM 2 worth of stamp duty?
I’d appreciate your answer on this, even though it might be a silly question. ^_^;;
SaviourV, you will be charged RM2.
So, let me get this straight: less than RM 1.5K, RM 1.00 stamp duty; more than that, RM 2.00 stamp duty?
That would mean that the stamp duty’s rounded UP to the next value. 2 decimal places, I guess. Correct me if I’m wrong.
>RM0 to RM1000, stamp duty is RM1
>RM1000 to RM2000 stamp duty is RM2
>RM2000 to RM3000 stamp duty is RM3
and so on
I have a question in part 3, If I make profit from contra grain transaction within T-3 days, is the profit be debited to my trust account within the same day of transaction date or when? please advise thanks.
Hi, the profit will be credited to your account on the day after T+3
volume bid ask volume
20 5.5 5.52 1000
calculate total amount payable.
purchase price at market order=RM5.52
then so on…
my question is y use ask price?
not use 5.5?becuz bid price is the price you purchase..am i right?correct me..
Bid is the price buyer is hoping for
Ask is the price seller is hoping for
What if u got a contra loss, and broker sold your share, but it still not enough to cover the loss?
I’m also wondering about this myself. Could someone please provide an explanation?
can you do an updated one with gst?
Ok will update. By the way, GST is only charge on Brokerage Fees & Clearing Fees.
Hi. thank you so much becoz your posts are really great and clear i have learnt a lot of the necessary knowledge before i enter stock market.
im looking to learn further such as how to analyze stocks and monitor the stocks after investing in it…
hi, i was wondering about the selling. if there are no buyers willing to buy my share at my price, will i still be holding onto my share?
Can a foreign worker buy and sell shares
Please help me to explain about delivery trading (long term investment).
1) brokeage charge for long term investment?
Did brokage will charge daily for long term investment?
Hi, for the stamp duty, is it 0.1% of transaction?
In your example you use RM5000 so we can simply say the stamp duty is RM5 because it is valued at RM1 for every RM1000.
What if we are buying stocks for RM2350? Will the stamp duty be RM3 then?