Position Size Calculator
Calculate position size from your account size, risk tolerance, and stop-loss level. Enter a trade setup to see the resulting share count, dollar risk, and portfolio exposure.
Updated
Educational purposes only.
This calculator provides estimates for educational purposes. Actual trading involves additional risks including slippage, gaps, and market volatility that may cause losses to exceed the calculated risk. This is not financial advice.
Educational purposes only. These calculators illustrate concepts and do not constitute investment advice. Read our disclaimer
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</p>What is Position Size?
Position sizing converts a chosen risk amount into a share count. Given how much of an account is being risked and how far away the stop-loss sits, the arithmetic returns the number of shares at which those two figures agree.
The formula
Shares = (account × risk %) ÷ (entry − stop)- account = total account value
- risk % = share of the account risked on the trade
- entry = entry price
- stop = stop-loss price
- (entry − stop) = risk per share
On a $50,000 account risking 1%, the dollar risk is $500. With an entry at $100 and a stop at $95, the risk per share is $5, so 500 ÷ 5 = 100 shares. That position costs $10,000, or 20% of the account, while the amount at risk if the stop is reached remains $500.
Position size and risk are different numbers
The worked example shows a $10,000 position carrying $500 of risk. Those two figures answer different questions: one is capital committed, the other is what is lost if the stop is reached.
The relationship runs through stop distance. A tighter stop produces a larger position for the same dollar risk, a wider stop a smaller one. Moving the stop from $95 to $98 changes risk per share from $5 to $2, so the same $500 supports 250 shares: a $25,000 position, half the account, with unchanged stated risk.
| Stop | Risk per share | Shares | Position size | % of account |
|---|---|---|---|---|
| $98 | $2 | 250 | $25,000 | 50% |
| $95 | $5 | 100 | $10,000 | 20% |
| $90 | $10 | 50 | $5,000 | 10% |
| $80 | $20 | 25 | $2,500 | 5% |
Dollar risk is identical in every row. Only the capital committed changes.
Risk as a percentage, not a fixed dollar figure
Sizing risk as a share of the account rather than a fixed dollar amount makes it self-adjusting. The amount risked falls automatically as the account falls, which slows the rate at which a losing sequence compounds.
A fixed dollar amount does the opposite: as the account shrinks, that same figure becomes a progressively larger share of what remains.
The arithmetic of recovery
Losses and the gains needed to undo them are not symmetric, because the gain is calculated on a smaller base. A 10% loss needs an 11.1% gain to return to even; a 50% loss needs 100%; an 80% loss needs 400%. The size of a loss decides how much harder the capital left over has to work, and that asymmetry is what makes position sizing arithmetic rather than preference.
Where the calculated risk breaks down
The output assumes the stop fills at the stated price. A stop order becomes a market order when triggered, and in a fast move or a gap at the open it can fill materially lower, so the realized loss exceeds the calculated one.
Overnight gaps are the clearest case: a stock closing at $96 and opening at $88 skips past a $95 stop entirely. Position sizing measures intended risk, not guaranteed risk.
What this calculator does not account for
- The stop fills at exactly the stated price, with no slippage or gap.
- Commissions and fees are excluded from both the position cost and the loss.
- The position is treated in isolation. Several positions in correlated names can move together, so total exposure exceeds the sum of the individual figures.
- Whole shares are assumed unless fractional shares are supported.
- Margin requirements and buying-power limits are not applied.
Position sizing is the arithmetic done beforehand, when only the share count is in question. The stock profit calculator handles the arithmetic afterwards. Stock Profit Calculator
How It Works
Enter your account size
Your total trading account balance — the basis for calculating risk.
Set your risk percentage
The maximum percentage of your account you are willing to lose on this trade (commonly 1-2%).
Enter entry and stop loss prices
Your planned entry price and the stop-loss price where you would exit to limit losses.
Review your position size
See the resulting share count, dollar risk, position value, and portfolio exposure percentage.
Frequently Asked Questions
Position sizing is the process of determining how many shares (or units) to buy or sell on a trade. It is based on your account size, how much you are willing to risk on a single trade, and the distance between your entry price and stop-loss price. Proper position sizing helps manage risk so that no single trade can significantly damage your portfolio.
The 1% rule means risking no more than 1% of your total account on any single trade. The 2% rule is a slightly more aggressive version. For example, with a $50,000 account and a 2% risk rule, the maximum you would risk on one trade is $1,000. These guidelines help limit drawdowns and preserve capital over many trades.
Position size is calculated by dividing your dollar risk (account size multiplied by risk percentage) by the risk per share (the difference between entry price and stop-loss price). For example, if your dollar risk is $1,000 and the risk per share is $10, you would buy 100 shares. The result is typically rounded down to whole shares.
A stop loss defines the price at which you exit a trade to limit losses. Without a stop loss, you cannot calculate the risk per share, which means you cannot determine a proper position size. The stop loss is what makes position sizing mathematical rather than guesswork. It turns an undefined risk into a measurable one.
Many traders keep individual positions between 5-10% of their portfolio, though the range varies with trading style and risk tolerance. Concentrated positions (above 20-25%) increase portfolio volatility. The position size calculator shows your portfolio exposure percentage so you can evaluate whether a trade is appropriately sized for your account.