How to Calculate a Sell Price for Stock

Before the Sale

• 1). Obtain an accurate quote for the stock. It is more important for you to know what price is currently available instead of the last price traded. Therefore, look instead to the "bid" or the "ask" price. The bid is the highest price a potential buyer of the stock is willing to pay for the stock, and the ask price is the lowest price an owner is willing to accept to sell. The stock quote is therefore the last price where the buyer and the seller, the bid and ask, were at the same price.
  
  
• 2). Consider both your target stock price and your target time frame, and whether or not you are aiming for one, the other or both. If you are selling a stock "short," discussed earlier as being when you sell stock you "borrowed" from your broker expecting to be able to buy it back later at a lower price, the target price is the price you sell it at when you make your first trade. Conversely, if you are selling stock you already own, also referred to as stock you are "long," your target sale price is the price you hope to sell your shares for in the future. Think about how long you want to keep the stock and/or what price you have as a target for the overall investment.
  
  
• 3). Consider placing a good-til-canceled (GTC) order to protect your investment. There are order types, also referred to as price types, aimed at allowing you to lock in profits or limit losses if the market moves in a specified direction. The basic order types used for this are limit orders, stop orders, or stop-limit orders. A "sell limit order" is an order to sell your shares at a specified price or better. Making that same limit order GTC means that you do not have to re-enter the order every day the market is open. Instead, your order to sell at that limit price is good until canceled. Keep in mind that your broker may also limit the length of a good-til-cancelled order; most brokers will only allow open GTC orders for 90 days at a time. This allows your to protect your investment, to a certain extent, without having to watch the market all the time. Review all order type guidelines and restrictions with your broker before deciding on an order type.
  
  
• 4). Decide if you want to sell all of your stock at once. All-or-none (AON) is an order type that ensures that all of your stock is sold at once, or it is not sold at all. Going back to our sell-limit order, if you placed an AON sell-limit order then your stock would only sell at a given price or higher, and only if all the shares could be sold at once. With an AON order, if there are insufficient shares available within the given trade parameters, your order will be placed back on the books as open. Alternatively, fill-or-kill (FOK) indicates that you want to sell all of your stock at once within the parameters, but if the price parameter is met and insufficient shares are available, the order is cancelled, or "killed," instead of remaining open.
  
  

After the Sale

• 1). Review your official trade confirmation(s). This is the record your broker will provide you to show that your trade was official. The confirmation will provide you, among other things, with the sale price, transaction date, and number of shares sold. This may be especially important if your stock position sold in multiple lots at different prices, or did not fully execute.
  
  
• 2). Reconsider future sale price(s) for any remaining shares. If you were unable to sell all of your shares, or if you intended to hold on to some of the shares, take time to consider the next future sale price and date.
  
  
• 3). Compute your capital gains and losses. Although some investors wait to do this until it is time to prepare income tax returns, it may be easier in the long run to complete the task soon after the closing transaction is completed. Capital gains and losses are reported to the IRS on Schedule D of Form 1040, and the IRS provides guidelines for calculating gains and losses for tax purposes.