Get the Tap app

Scan the QR code to download the app

QR code to scan for downloading the Tap app

Risk Warning - Notice to UK Users  

Estimated reading time: 2 mins

Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.

What are the key risks?

1.You could lose all the money you invest

The performance of most cryptoassets can be highly volatile, with their value dropping as quickly as it can rise. You should be prepared to lose all the money you invest in crypto assets.

The crypto asset market is largely unregulated. There is a risk of losing money or any cryptoassets you purchase due to risks such as cyber-attacks, financial crime and firm failure.

2.You should not expect to be protected if something goes wrong

The Financial Services Compensation Scheme (FSCS) doesn’t protect this type of investment because it’s not a ‘specified investment’ under the UK regulatory regime – in other words, this type of investment isn’t recognised as the sort of investment that the FSCS can protect. Learn more by using the FSCS investment protection checker here.

The Financial Ombudsman Service (FOS) will not be able to consider complaints related to this firm. Learn more about FOS protection here.

3.You may not be able to sell your investment when you want to

There is no guarantee that investments in crypto assets can be easily sold at any given time. The ability to sell a crypto asset depends on various factors, including the supply and demand in the market at that time.

Operational failings such as technology outages, cyber-attacks and comingling of funds could cause unwanted delay and you may be unable to sell your crypto assets at the time you want.

4.Cryptoasset investments can be complex

Investments in crypto assets can be complex, making it difficult to understand the risks associated with the investment.

You should do your own research before investing. If something sounds too good to be true, itprobably is.

5.Don’t put all your eggs in one basket

Putting all your money into a single type of investment is risky. Spreading your money across different investments makes you less dependent on any one to do well.

A good rule of thumb is not to invest more than 10% of your money in high-risk investments. Learn more here.

If you are interested in learning more about how to protect yourself, visit the FCA’s website here.

For further information about cryptoassets, visit the FCA’s website here.

Investing 101: Calculating gains and losses

Learn how to identify and calculate gains and losses in your investments so you can make informed decisions about your money. 

Linkedin logo

Investing is a great way to grow your wealth and reach financial goals, but it is important to understand the potential risks as well as the rewards. Knowing how to identify capital gains and losses in investments is essential for any investor who wants to make informed decisions about their money. 

Gains and losses will determine whether or not an investment has been successful, so understanding them is critical to making wise choices when investing. Not only that but being able to recognize capital gains and losses can help investors decide when it’s time to get out of an investment before they incur too much damage. 

By learning to spot a gain or loss quickly, investors can protect their funds from unnecessary harm while reaping the benefits of investing. Here we break down how to calculate capital gains and losses.

The basics: how to calculate capital gains/loss

Investors will need to first identify the original cost or purchase price of the investment in order to calculate the percentage capital gain on an investment. You can get this from your broker, or any electronic trade confirmations you might have received. 

The next step is to subtract the original cost of the same investment from the selling purchase price (current value) to arrive at the gain or loss amount. If the amount is negative, this will indicate a loss while a positive amount will illustrate the profit. 

Then take this amount (the gain or loss) and divide it by the original purchase price. Multiply this by 100 and this will establish your gain or loss as a percentage.

Gain/loss ($ amount) = selling price - purchase price

Gain/loss percentage = [(selling price- purchase price) / purchase price] x 100

When the market value of an investment is lower than its cost basis, leading to a negative percentage return, it constitutes a loss on that particular asset.

When the market value or selling price surpasses your initial investment, you'll get a positive percentage that reflects this gain.

Why calculating gain/loss is important

Calculating the loss or gains you've made on an investment is crucial not only for staying on top of your financial situation but also when it comes to monitoring your investment strategy. If you are continuously making losses on an investment it might be time to change course, however, you will only know this by doing the calculations. 

Calculating the capital gains or losses on an investment as a percentage is important because it shows how much was earned as compared to the amount needed to achieve the gain.

Additionally, calculating the gains or losses of an investment are important when calculating any capital gains tax. Having a clear understanding of the financial situation will ensure that you are not underpaying or overpaying on capital gains tax. Be sure to check the capital gains tax rate in your jurisdiction as this will change from area to area.

Additional aspects to consider

As with anything, there are additional costs to factor in. For investments, this might be commissions, broker fees, taxes, etc. Below we look at how to factor in transaction costs, dividends, and trading fees.

Transaction Costs

Take your final gain/loss amount and subtract and transaction costs incurred from this amount.

Gain/loss ($ amount) = (purchase price - selling price) - transaction costs


When calculating your gains, any additional income or distributions should be factored in. Dividends, whether from specific stocks or mutual funds, are the most common form of investment income and are paid to investors on a per-share basis. Not all shares pay out dividends so be sure to confirm this prior to making the trade.

Say an investor owns 100 shares and the company pays out $5 per share annually, this equates to $500 in dividends in a single year. Let's say that each share was bought at $20 and is now worth $40.

Gain/loss percentage 

= [((selling price - purchase price) + dividends) / purchase price] x 100

= [(($4,000 - $2,000) + $500) / $200] x 100

= 125%

Therefore, the dividends payout increased the gains on this investment by 25%. In this example, we have not included trading fees, commissions, etc.

Trading fees

Trading fees or brokerage fees are often an unavoidable aspect of trading and should be factored into your investment calculations. Using the above example, let's say the broker charges $50 in fees for its services and any transaction costs incurred. This amount will need to be subtracted from the original gain/loss amount before dividing it by the original purchase cost.

Gain/loss percentage 

= [((selling price- purchase price) - fees) / purchase price] x 100

= [(($4,000 - $2,000) - $50) / $2,000] x 100

= 97.5%

Here the trading fees dropped the investment gains by 2.5% from 100% to 97.5%.

Capital gains tax rate and mutual funds

Calculating capital gains or losses in a mutual fund is important for several reasons, but one key example is for tax purposes, known as capital gains taxes.

When an investor sells shares of a mutual fund, they may realize a capital gain or loss, which is the difference between the sale price and the purchase price of the shares. If the sale price is higher than the purchase price, the investor realizes a capital gain, and if the sale price is lower than the purchase price, the investor realizes a capital loss.

Capital gains are typically taxable, meaning that the investor must pay capital gains tax on the amount of the gain. However, if the shares were held for more than one year before being sold, the gain may be taxed at a lower rate known as the long-term capital gains rate, depending on the specific tax laws in your country. In contrast, capital losses can be used to offset capital gains, reducing the investor's overall tax liability.

Calculating capital gains or losses in a mutual fund can be more complex than for individual stocks, as mutual funds may buy and sell securities frequently, resulting in multiple tax lots with different purchase prices and holding periods. To accurately calculate gains or losses, investors must track each tax lot and determine the cost basis of each lot, which is the original purchase price plus any reinvested dividends or capital gains distributions.

Failing to properly calculate capital gains or losses on one's investments can result in overpaying or underpaying taxes, which can be costly and potentially lead to penalties. Therefore, it is important for investors to carefully track their mutual fund investments and accurately calculate their capital gains or losses for tax purposes.


This article is for general information purposes only and is not intended to constitute legal or other professional advice or a recommendation of any kind whatsoever and should not be relied upon or treated as a substitute for specific advice relevant to particular circumstances. We make no warranties, representations or undertakings about any of the content of this article (including, without limitation, as to the quality, accuracy, completeness or fitness for any particular purpose of such content), or any content of any other material referred to or accessed by hyperlinks through this article. We make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up-to-date.


Frequently Asked Questions