What is ROI?
In and finance, the ROI (also known as “rate of profit”, “yield” or sometimes just “return”) is the ratio of moneyMoney is a generally accepted medium of exchange to buy and... More gained or lost on an relative to the amount of money invested.
The amount of money gained or lost may be referred as , profit/loss, gain/loss or net income/loss. The money invested may be referred to as the , capital or cost basis of the investmentInvestment is the commitment of money or capital to purchase... More.
ROI is usually expressed as a percentage.
The initial value of an investment does not always have a clearly defined monetary value, but for purposes of measuring ROI, the must be clearly stated along with the rationale for this initial value.
Similarly, the final value of an investment also does not always have a clearly defined monetary value, but for purposes of measuring ROI, the final value must be clearly stated along with the rationale for this final value.
The rate of return can be calculated over a single period, or expressed as an average over multiple periods of time.
This means that you can put an ROI on a single trade. For example, you invest $100 in a trade and get $110 back. Then your ROI would be +10%.
You can also put an ROI onto a whole trading period. Say your is $1,000. At the end of the month, you have $1,019 on your . Your monthly ROI would be +1.9%.
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