A trader doesn't make capital gains on trading stock. Capital Gains only applies to investments. A trader will have income or loss from trading and this income/loss is calculated using the formula:
Income (or Loss) = Sales - Cost of Sales where Cost of Sales = Opening Stock + Purchases - Closing Stock.
There is flexibility in how you value your stock (can be at cost price or at year end market value) and every lot you have can be valued differently (some at cost, some at market value). The one stipulation is that the value of your opening stock for the year must be the value of your closing stock of the previous year.
Because of the flexible valuation method, it is possible to have taxable income even if no trades are made for the year, for instance if you value all stock at market price and there is an increase in the market price over the year.
If you have a trading loss for the year, that can be applied against other income, unlike capital losses, which can only be applied against other capital gains. That is one advantage of being a trader, but the disadvantage is that not being under the capital gains regime, there is no discount on gains on shares held more than 12 months.
