Position Size Calculator
How many shares or lots to trade so a stop-loss costs a fixed share of your capital, with reward-to-risk and the win rate it needs.
Position size is the amount you are willing to lose divided by the distance from entry to stop-loss: capital × risk % ÷ (entry − stop). Enter your capital, risk per trade, entry and stop to get the number of shares (rounded down to whole F&O lots if you give a lot size), the position value, the loss at the stop and the reward-to-risk ratio.
Position sizing starts from the loss you can accept, not from the number of shares you would like to own. Decide what fraction of capital one trade may lose, measure the distance to the stop-loss, and the quantity follows.
Load a symbol to use its last close as the entry and, for F&O stocks, its current lot size; the stop and target keep the distances you had set. The quantity is always rounded down so the loss at the stop stays within budget.
The formula
Risk amount = capital × risk %. Risk per share = |entry − stop-loss|. Quantity = risk amount ÷ risk per share, rounded down (and down to whole lots for futures). With ₹5,00,000 capital, 1% risk, entry ₹800 and stop ₹780: ₹5,000 ÷ ₹20 = 250 shares, a ₹2,00,000 position.
Reward-to-risk compares the distance to the target with the distance to the stop. A trade risking ₹20 to make ₹40 is 2R, and breaks even before costs if it wins more than one time in three: break-even win rate = risk ÷ (risk + reward).
Limits of a stop-loss
The calculation assumes the stop fills at its price. A gap at the open or a fast market can fill it well beyond, so the real loss can exceed the budget, more so with leverage. Brokerage, STT and slippage also add to the cost of every trade and are not included here.
Key takeaways
- Quantity = capital × risk % ÷ |entry − stop|, rounded down.
- For futures, round down to whole lots; if one lot exceeds the budget, the trade is too big.
- Break-even win rate = risk ÷ (risk + reward), before costs.
- Gaps can fill a stop beyond its price.
Frequently asked questions
How do I calculate position size?
Multiply your capital by the percentage you are willing to risk, then divide by the distance between entry and stop-loss. ₹5 lakh × 1% = ₹5,000; with a ₹20 stop distance that is 250 shares.
How much should I risk per trade?
Many traders cap the loss on one trade at 1% to 2% of capital, so a string of losses does not wipe out the account. It is a convention, not a rule; the calculator works with any figure.
How do I size an F&O position in lots?
Compute the quantity from your risk budget as usual and round down to a whole multiple of the lot size. If even one lot would lose more than your budget at the stop, the trade does not fit your risk limit.
What is a good risk-reward ratio?
No ratio is good on its own; it has to be read with the win rate. A 1:2 trade breaks even winning one time in three, a 1:1 trade needs to win half the time, both before costs.