1. What is Daily Rate of Return?

Daily rate of return measures the percentage change in a stock's price from the beginning to the end of a trading day. It's a key metric for investors to assess daily performance of their investments.

2. How Does the Calculator Work?

The calculator uses the daily return formula:

Where:

• End Price — Closing price of the stock
• Start Price — Opening price of the stock

Explanation: The formula calculates the percentage change in stock price over a single trading day, showing the daily gain or loss.

3. Importance of Daily Return Calculation

Details: Daily return calculation helps investors track short-term performance, assess volatility, and make informed decisions about buying, holding, or selling stocks.

4. Using the Calculator

Tips: Enter the opening price and closing price in dollars. Both values must be positive numbers with the start price greater than zero.

5. Frequently Asked Questions (FAQ)

Q1: What does a negative daily return indicate?
A: A negative daily return means the stock decreased in value that day, resulting in a loss.

Q2: How is daily return different from total return?
A: Daily return measures performance over one day, while total return includes dividends and covers longer periods.

Q3: Can daily return be annualized?
A: Yes, but with caution. Daily returns can be annualized using compounding, but this assumes consistent daily performance.

Q4: What is considered a good daily return?
A: This varies by stock and market conditions. Generally, consistent positive returns are desirable, but expectations depend on the stock's volatility.

Q5: Does this calculation account for dividends?
A: No, this basic formula only considers price changes. For total return including dividends, additional calculations are needed.