Position size calculator
Work out how many shares to buy so that a stop-loss hit costs only the percentage of capital you choose.
What position sizing means
Position sizing decides how many shares or units you buy on a trade. Risk-based sizing starts from how much you are prepared to lose if your stop-loss is hit, and works backwards to the quantity. This keeps every loss roughly the same size, whatever the stock price or how far away the stop-loss is.
The formula
Risk per share = |Entry − Stop-loss|
Position size = Amount at risk ÷ Risk per share (rounded down)
Worked example
With ₹1,00,000 of capital and a 1% risk rule, you can lose ₹1,000 on the trade. You plan to buy at ₹500 with a stop-loss at ₹480, so you risk ₹20 per share. ₹1,000 ÷ ₹20 = 50 shares, a position worth ₹25,000 (25% of your capital). If the stop-loss is hit, you lose about ₹1,000 plus charges.
Now move the stop-loss closer, to ₹490. Risk per share falls to ₹10 and the calculator allows 100 shares (₹50,000). The rupee risk is the same; only the size changes. A wide stop means a small position, and a tight stop allows a larger one.
Choosing a risk percentage
| Risk per trade | Loss on ₹1,00,000 | Losing trades in a row to lose 10% of capital |
|---|---|---|
| 0.5% | ₹500 | about 21 |
| 1% | ₹1,000 | about 11 |
| 2% | ₹2,000 | about 6 |
| 5% | ₹5,000 | about 3 |
The last column assumes each loss is a percentage of what is left. Losing streaks happen even with a sound approach, which is why many traders keep risk per trade at 2% or less.
Things the formula leaves out
- Charges. Brokerage, STT and other costs add to the loss. Run the trade through the brokerage calculator to see them.
- Gaps and slippage. A stock can open below your stop-loss, so the real loss can exceed the planned risk.
- Lot sizes. In F&O you trade in lots (for example 65 units for Nifty), so round the result down to whole lots.
- Leverage. If the position value is more than your capital, the calculator warns you. Using margin to take that position increases what you can lose.
Using it with the other calculators
Size the trade here, check the risk-reward ratio of your target, and then see the exact costs in the brokerage calculator. The guide how to calculate position size goes through more examples.
Frequently asked questions
How many shares should I buy?
Divide the amount you are willing to lose on the trade by the distance between your entry and stop-loss. With ₹1,000 of risk and a ₹20 stop distance, that is 50 shares.
What is the 1% rule in trading?
The 1% rule means risking no more than 1% of your trading capital on any single trade. It is a rule of thumb, not a regulation, and some traders use 0.5% or 2%.
Does position size include brokerage and taxes?
No. The formula sizes the trade on price risk only. Add charges using the brokerage calculator, or leave a small buffer in your risk amount.
Can I use this for short trades?
Yes. For a short trade the stop-loss is above the entry. The calculator uses the absolute distance and labels the trade as short.
How do I use it for futures and options?
Enter your entry and stop-loss in the contract price, then divide the result by the lot size and round down to whole lots.
Related guides
Other calculators
Written and maintained by Mantu Kumar
Mantu builds TradeProfy’s calculators and checks every statutory rate against exchange circulars, broker rate cards and the Finance Act. He is not a SEBI-registered adviser, so TradeProfy explains costs and maths but never tells you what to trade.
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