Position Size Calculator

The position size calculator estimates a risk-based number of shares from trading capital, a chosen risk percentage, entry price and stop price. It uses the absolute distance between entry and stop, so the same risk-distance method works when the stop is below or above the entry.

How it works

Enter trading capital, the percentage of capital you are willing to risk, entry price and stop price. The calculator converts the risk percentage to a maximum monetary risk, divides it by the absolute entry-to-stop distance and rounds the resulting share quantity down to a whole number.

The formula

Trading capital, risk percentage and entry price must be positive. Risk percentage cannot exceed 100%, stop price cannot be negative and stop price cannot equal entry price. The engine uses the absolute stop distance and does not determine whether a trade is long or short. It also does not cap position value at available capital, so a very tight stop can produce capital used above 100%, implying that the risk-based size would require leverage or more capital.

Worked example

With capital 100,000, risk 1%, entry 40 and stop 38, monetary risk is 1,000 and risk per share is 2. The calculator returns 500 shares, position value 20,000 and capital used 20%. A stop of 42 gives the same two-unit risk distance.

This is a risk-sizing scenario, not investment or trading advice. Verify purchasing power, leverage rules, liquidity, transaction costs and actual order behavior before using a position size.

Frequently asked questions