Position Size Calculator for Stocks & Options
Work out how many shares or option contracts to trade so that a losing trade costs no more than the amount you chose. Enter your account size, the percent you will risk, and your entry and stop (or the option premium). Free, no account.
Your risk
How the calculator works
Position sizing starts from the loss you can accept, not from how much you want to buy. Your dollar risk is account size × risk %. For a stock, each share loses the distance between your entry and your stop if the stop is hit, so the number of shares is the dollar risk divided by that distance, rounded down to whole shares. The position value and its share of your account tell you how big the trade really is.
For a bought option, the loss per contract is the premium × 100, or the share of it you would let go before closing. The number of contracts is your dollar risk divided by that loss, rounded down. This sizes the loss you chose; it does not say the trade is a good one or that the stop will fill at your price.
Worked example: a stock trade
Your account is $10,000 and you risk 1% a trade, so your risk is $100. You plan to buy at $50 with a stop at $48, a $2 distance. $100 ÷ $2 = 50 shares. The position costs 50 × $50 = $2,500, or 25% of the account, but if the stop is hit you lose about $100, not $2,500. With a $1 stop distance the same math gives 100 shares ($5,000), so a tighter stop means a bigger position for the same risk.
Frequently asked questions
How do you calculate position size?
Decide how much of your account you are willing to lose if the trade fails, in dollars, then divide by the loss per share. Shares = (account × risk %) ÷ |entry price − stop price|. With a $10,000 account, 1% risk, an entry at $50 and a stop at $48, you risk $100 and each share loses $2 if the stop is hit, so the size is 50 shares.
What is the 1% rule in trading?
It is a common guideline that caps the loss on any single trade at about 1% to 2% of the account, so a string of losing trades cannot do deep damage. It is a habit many traders use, not a rule or a recommendation, and the right number depends on your account and your tolerance for losses.
How do I size an options trade?
When you buy an option, the most you can lose is the premium, so divide your dollar risk limit by the cost of one contract (premium × 100). If you plan to close the trade after losing only part of the premium, such as half, use that share as the loss per contract. For spreads, use the maximum loss per share of the spread in place of the premium. Selling options without a defined risk needs a different approach, because the loss can be much larger than the premium.
Does a stop-loss guarantee I only lose that amount?
No. A price can jump past your stop overnight or in a fast market, and option quotes can be wide, so the real loss can be bigger than planned. That is one reason many traders keep the risk limit small.
Learn the idea behind it
- Lesson 3.2: Position sizing and buying power
- Lesson 1.1: Call options, buying and selling
- Lesson 5.0: Vertical spreads
Want to try it on a real option chain? Signal Desk has option chains (about 15 minutes delayed) and a paper-trading account, so you can practice with simulated money.
Try it with your own numbers
Free calculators, no account needed.
This calculator is for education. It does simple arithmetic on the numbers you type, shows nothing about whether a trade is a good idea, and leaves out commissions, taxes, dividends and early assignment. Options involve risk and you can lose the money you put in. It is not financial advice.