Position Size Calculator

How to calculate position size

Position size comes from dividing the money you are willing to lose by the loss per share at your stop. The size changes with every trade and the dollar risk stays the same, which is the point of the method.

This calculator rounds down to a whole share, contract or 0.01 lot, then shows the actual risk after rounding, because rounding up would break your limit. For forex, enter the stop in pips and the pip value per standard lot. For futures, enter the tick size and tick value from the contract specification.

Shares = (account × risk %) ÷ |entry − stop|. Lots = (account × risk %) ÷ (stop pips × pip value per lot). Contracts = (account × risk %) ÷ (stop ticks × tick value).

Worked example

With a $50,000 account risking 1%, your budget is $500. Buying at $185 with a stop at $180 puts $5 a share at risk, so the position is 100 shares.

That position costs $18,500, or 37% of the account, and only $500 of it is at risk if the stop fills at $180. Move the stop to $182 and the size rises to 166 shares, because $500 ÷ $3 is 166.67 and the calculator rounds down.

What the result does not account for

• Slippage and gaps. A stock can open below your stop, and the loss is then larger than the risk shown.
• Commissions and fees, which add to the real loss on small positions.
• Whether your broker will lend enough margin when the position is larger than the account.
• Correlation. Five positions that fall together behave like one large position.

Frequently asked questions