Position size calculator
How many shares to buy so that being wrong costs a set amount. Enter your account, the risk you accept, your entry and your stop.
Calculator
$
Risk on this idea
%
What you accept losing if the stop is hit.
$
$
%
$
Shares to buy
62
$4,960.00 position, 9.9% of the account
- Risk per share
- $8.00
- Loss if the stop is hit
- $496.00 (0.99%)
- Risk budget
- $500.00
- Reward to risk
- 2.50 to 1
On this page4 sections
What it works out
Position sizing starts from the loss you can accept and works back to a share count. It answers how much to buy, which is a separate question from what to buy.
shares = risk budget / (entry − stop), rounded down
- Account $50,000. Risk 1%, so the budget is $500.
- Entry $80, stop $72. Risk per share is $8.
- $500 / $8 = 62.5, rounded down to 62 shares.
- Position: 62 × $80 = $4,960, which is 9.9% of the account.
- If the stop is hit: 62 × $8 = $496 lost, 0.99% of the account.
- With a target of $100: reward $20 per share against $8 of risk, 2.5 to 1.
The inputs
| Input | Meaning |
|---|---|
| Account size | The money this decision is being sized against. |
| Risk | What you accept losing on this one idea, as a percent of the account or in dollars. |
| Entry | The price you expect to buy at. |
| Stop | The price at which you would accept you are wrong and sell. |
| Max allocation | Optional. The largest share of the account one position may take. |
| Target | Optional. Used only to show reward against risk. |
Reading the result
- Shares are rounded down to a whole number, so the actual risk is a little under the budget.
- If you set a max allocation and the risk-based size is larger, the cap wins and the result says so. A tight stop on a small risk budget can otherwise produce a very large position.
- Without leverage a position cannot cost more than the account. The calculator never suggests one that does.
- A stop above the entry is treated as a short position. The arithmetic is the same.
What it leaves out
- Gaps. A stock can open far below your stop after bad news. The loss is then larger than the budget, and nothing about sizing prevents it.
- Costs and taxes.
- Correlation. Five positions each risking 1% in the same sector are closer to one position risking 5%.
- Whether the stop makes sense. A stop placed where normal daily movement will reach it is a decision to sell soon.
Read next
- Drawdown recovery calculatorA fall needs a larger gain to undo it. Enter a drawdown to see the gain required, and how long that takes at a steady return.
- Portfolio analyticsWhat the figures under your holdings work out, how each one is computed and what it leaves out.
- The practice accountA paper account with $100,000 of pretend money. How orders fill, what is compared with what, and how it differs from real trading.
Something here wrong or unclear? Tell us. Informational only, not investment advice.