Position size calculator

How position sizing works

Most traders decide how much to buy before they decide where they are wrong. Position sizing reverses that order. You first fix the rupee amount you are willing to lose on a single trade, then let the distance to your stop-loss determine the quantity. The size is an output, never an input.

The formula

There are only two steps. First, your risk budget is your account size multiplied by your risk percentage. Second, your quantity is that budget divided by the per-unit risk, which is the absolute difference between your entry price and your stop-loss price.

Quantity = (account size × risk %) ÷ |entry price − stop-loss price|

The result is always rounded down. Rounding up would push you over the risk limit you just set, so a calculation that lands on 166.7 units becomes 166. Direction does not change the arithmetic: a long with a stop below entry and a short with a stop above entry at the same distance produce the same size.

Why the stop drives the size

On a ₹5,00,000 account risking 1%, your budget is ₹5,000 per trade. Buy at ₹250 with a stop at ₹245 and the per-share risk is ₹5, so you take 1,000 shares, a ₹2,50,000 position. Widen the stop to ₹240 and the per-share risk doubles to ₹10, so the size halves to 500 shares and the position falls to ₹1,25,000. The amount at risk is ₹5,000 in both cases.

A volatile stock that needs a wide stop earns a smaller position; a tight setup earns a larger one. Traders who size by a fixed rupee amount or a fixed share count instead end up risking wildly different amounts trade to trade, which is what makes a normal losing streak feel like a disaster.

One thing to watch: a tight stop can produce a position worth far more than your account. At ₹250 entry with a ₹249.50 stop, the same ₹5,000 budget calls for 10,000 shares, ₹25,00,000 of stock on a ₹5,00,000 account. The risk maths is correct, but you would need five times your capital, or margin you may not have. For cash and delivery trades the calculator flags this for you: the quantity it shows is what your risk budget allows, not what your capital covers. In F&O mode it does not, because notional exposure is not the capital actually blocked. Check the margin your broker requires instead.

Lot rounding for F&O

Futures and options trade in fixed lots, so you cannot take an arbitrary quantity. The calculator first works out the raw unit count, then rounds down to a whole number of lots. Suppose you buy a NIFTY option at ₹120 premium with a stop at ₹90: ₹30 of risk per unit. A ₹5,000 budget funds 166 units, but at a lot size of 65 that is only 2 whole lots, giving 130 units.

The consequence is that your actual risk is ₹3,900, or 0.78% of the account, rather than the full 1%. Lot rounding always leaves you slightly under budget, never over. When the budget cannot fund even a single lot, the size is zero. Skip the trade or find a cheaper contract instead of stretching the risk rule to make it fit.

Forex and gold lot sizing

Forex and gold use the same rule, measured in lots instead of shares. One standard lot (1.00) is 100,000 units of the base currency, or 100 troy ounces of gold. The loss per lot is the stop distance multiplied by that contract size, and the lot size is your risk budget divided by that loss.

Lots = (account balance × risk %) ÷ (|entry − stop| × contract size)

On a $10,000 account risking 1%, your budget is $100. Buy EUR/USD at 1.0850 with a stop at 1.0800 and the stop is 50 pips away. At $10 a pip on one lot, that is $500 per lot, so you take 0.20 lots. Buy gold at $3,400 with a stop at $3,390 and every lot loses $1,000 at the stop, so the same $100 budget buys 0.10 lots, or 10 ounces.

When the pair is not quoted in US dollars the loss has to be converted. For USD/JPY the calculator converts at your stop price. For crosses such as EUR/GBP or GBP/JPY it asks for the current GBP/USD or USD/JPY rate, because the loss lands in pounds or yen. Lots are rounded down to 0.01, the smallest size most brokers accept. Leverage does not change the size: it only changes how much margin the position blocks, so add it only to check that your broker will accept the trade.

Crypto position sizing

Crypto works like stocks, except the quantity can be a fraction of a coin and fees are large enough to matter. A stopped-out trade pays the fee twice, on the entry and on the exit, so the calculator adds both to the loss per coin before it divides.

Quantity = risk budget ÷ (|entry − stop| + fee % × (entry + stop))

On a 10,000 USDT account risking 1%, your budget is 100 USDT. Buy BTC at 100,000 with a stop at 98,000 and the price risk is 2,000 per coin. A 0.05% taker fee on both fills adds 99, so each coin loses 2,099 at the stop and you take 0.047 BTC, rounded down to the exchange’s order step. Without the fee you would have sized 0.05 BTC and lost about 105 USDT, not 100.

On futures, leverage does not change this size. It only sets how much margin the position blocks. High leverage with a wide stop is how traders get liquidated before their stop is reached, so check that the liquidation price sits beyond your stop.

Position sizing controls risk per trade, not overall exposure. It does not account for correlation between open positions, spreads, commissions, weekend gaps, or slippage. A stop is an instruction, not a guarantee of your exit price.