What Happens If a Stock Goes Up 100 Percent?

When a stock experiences a 100 percent gain, it signifies that the initial investment in that stock has effectively doubled in value. This means the stock’s market price has significantly increased from its acquisition.

Understanding a 100% Stock Gain

If an investor purchases 100 shares of a company’s stock at $50 per share, the initial investment totals $5,000. Should that stock’s price rise to $100 per share, the value of those 100 shares would then be $10,000, representing a 100 percent gain on the original investment.

The actual profit from a stock sale is determined by its cost basis. Cost basis is the original price paid for an investment, which includes any commissions or fees incurred during the purchase. This figure is subtracted from the sale price to determine the capital gain or loss.

The distinction between unrealized and realized gains is important. An unrealized gain represents a potential profit on an investment that has increased in value but has not yet been sold, often called a “paper gain.” It exists only as long as the stock is held and its market value remains above the purchase price. Conversely, a realized gain occurs only after an investment is sold for more than its cost basis. This action locks in the profit. Taxes become applicable only when gains are realized through a sale.

Taxation of Realized Stock Gains

Once a stock gain has been realized through a sale, it typically becomes subject to capital gains tax. The specific tax rate applied depends on the asset’s holding period, which determines if the gain is short-term or long-term.

Short-term capital gains are profits from the sale of assets held for one year or less. These gains are generally taxed at an individual’s ordinary income tax rates, which can range from 10% to 37% for the 2025 tax year, depending on taxable income and filing status. A short-term gain is treated similarly to wages or other regular income for tax purposes.

In contrast, long-term capital gains result from the sale of assets held for more than one year. These gains typically qualify for preferential, lower tax rates, which for the 2025 tax year are 0%, 15%, or 20%. The specific long-term capital gains tax rate depends on the taxpayer’s overall income level. For high-income earners, an additional 3.8% Net Investment Income Tax (NIIT) may also apply to certain investment income, including capital gains, if their adjusted gross income exceeds a set threshold.

Brokerage firms are required to report stock sales to the Internal Revenue Service (IRS) on Form 1099-B, “Proceeds From Broker and Barter Exchange Transactions.” This form details the sale proceeds and often includes the cost basis, acquisition date, and sale date, which are critical for tax reporting. Taxpayers use the information from Form 1099-B to complete Form 8949, “Sales and Other Dispositions of Capital Assets,” where individual transactions are listed. The totals from Form 8949 are then transferred to Schedule D (Form 1040), “Capital Gains and Losses,” which is used to calculate the overall capital gain or loss for the tax year.

Portfolio Weighting Implications

A 100 percent stock gain significantly impacts its proportion within an investor’s overall portfolio, even if other investments remain unchanged. When a single stock doubles in value, its increased worth mathematically alters its weighting relative to the total portfolio value. This shift occurs because the appreciated stock now represents a larger percentage of the entire investment allocation.

For example, consider a portfolio initially valued at $100,000, where a single stock comprises $5,000 (5% of the total). If that specific stock experiences a 100 percent gain, its value increases to $10,000. Assuming the rest of the portfolio’s value remains constant at $95,000, the total portfolio value would then be $105,000. The stock that doubled now represents approximately 9.5% ($10,000 / $105,000) of the new total portfolio value.

This change means the investor now has a higher concentration in that one stock. The initial allocation strategy is altered, as the single stock now holds a more prominent position than originally intended. This shift in allocation is a direct mathematical consequence of the substantial gain experienced by the individual holding.