Position Size & Risk Calculator
How many shares to buy so that hitting your stop costs a fixed share of the account. Position size is the risk decision; the entry is not.
Also called: risk per trade calculator, lot size calculator.
500 shares, a position of $125,000.00. If the stop is hit you lose $5,000.00, which is 1% of the account exactly as intended.
An estimate, not an offer or a guarantee. Projected returns assume the rate you entered holds for the whole term, which no market does.
This is what the calculation gives for the numbers you entered. It is an estimate, not advice, and it knows nothing about your situation beyond those numbers. Rules for United States change on a published schedule; the effective date is shown on every rule-based tool.
How this is calculated
Decide what a losing trade may cost, in money, before deciding how much to buy. The distance from entry to stop is the risk per share, so dividing the money you are willing to lose by that distance gives the position size. A tighter stop allows a larger position for the same risk, which is the relationship most people have backwards.
shares = (account * risk per trade) / (entry price - stop price)- A
- Account size (currency)
- r
- Risk per trade (decimal)
- P_e
- Entry price (currency)
- P_s
- Stop price (currency)
Method and limits
What it assumes
- The stop is honoured at the price set, which a gap can prevent.
What it deliberately does not model
- It does not account for slippage or for a gap through the stop, both of which make the realised loss larger.
- A position sized this way can still exceed sensible concentration limits, so the position share of the account is shown too.
Formula version 1.0.0 · definition 1.0.0 · United States · Report a problem with this calculator
Frequently asked questions
- Why does a tighter stop mean a bigger position?
- Because the money at risk is fixed. If each share can only lose you one rupee rather than ten, you can hold ten times as many for the same total loss.
- What is an R multiple?
- One R is the amount you risked. A trade that makes twice what it risked is a 2R trade, which lets you compare outcomes across positions of very different sizes.