Effect of Commissions on Gross Profit

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Chapters in this video

  1. 0:00 Gross versus net profit: the broker toll booth
  2. 1:37 Round-turn commission: one ticket for the whole journey
  3. 2:55 Winning trade math and formula check
  4. 3:58 Losing trade math: commission deepens the loss
  5. 4:36 Beating the double-count and loss-cushion traps
  6. 5:48 Rapid-fire exam recap

What this video covers

  • The exact definition of a round-turn commission: a single charge covering both the entry and exit of a position, not billed per leg
  • Why the round-turn rate is multiplied by the number of contracts and subtracted exactly once, never doubled
  • How to convert a per-side commission quote to a round-turn cost when needed
  • The formula for net profit: gross profit minus total round-turn commissions
  • Why a commission shrinks a gain and enlarges a loss, always moving the result in the losing direction
  • How to calculate net profit on a winning trade, and why the commission comes out of the gross one time for the whole round trip
  • How to calculate net loss on a losing trade, and why subtracting commission from a negative gross deepens the loss rather than cushioning it

Read the full lesson, free

This video's complete written lesson is free to read in the CertFuel app, no signup wall. The complete Series 3 course also includes adaptive practice questions and spaced-repetition flashcards, free through the end of 2026.

Read the Free Lesson → free · no signup wall