How the position size is worked out
Four numbers come from you and everything else is derived from them. The stop price is the only thing that turns a percentage of your account into a number of shares: the wider the distance between your entry and your stop, the fewer shares fit inside the same money.
- Money at risk = account size × risk % ÷ 100
- Risk per share = entry price − stop price
- Shares to buy = money at risk ÷ risk per share
- Cost of the position = shares to buy × entry price
- Share of the account = cost of the position ÷ account size × 100
- Average cost after the buy = (money already in + cost of this buy) ÷ (shares already held + shares bought)
Shares = (account × risk % ÷ 100) ÷ (entry − stop)
Worked example: an account of 10,000.00, a risk of 1%, an entry price of 50.00 and a stop price of 48.00. The money at risk is 10,000.00 × 1 ÷ 100 = 100.00. The risk per share is 50 − 48 = 2.0000. So the size is 100.00 ÷ 2.0000 = 50.0000 shares — 50 whole shares if your broker does not take fractions. Those shares cost 50.0000 × 50 = 2,500.00, which is 2,500.00 ÷ 10,000.00 = 25.00% of the account. Note the two sides of that trade: a quarter of the account is committed, but only 100.00 of it — one percent — is at risk, because the stop sits 4% below the entry price.
Worked example with an existing position: the account holds 25,000.00, the risk is 2%, the entry is 60.00 and the stop is 54.00. The money at risk is 500.00 and the risk per share is 6.0000, so the size is 83.3333 shares, and those shares cost 4,999.99 — 19.99% of the account. You already hold 100.0000 shares at an average cost of 40.0000, which is 4,000.00 of your money in the stock. After this buy you hold 100.0000 + 83.3333 = 183.3333 shares for 4,000.00 + 4,999.99 = 8,999.99, so your average cost becomes 8,999.99 ÷ 183.3333 = 49.0908. That is the number a position size calculator normally leaves out: not only how many shares this trade is, but what it does to the average cost you were carrying.
Rounding: every figure on this page is rounded down, never up — the same rule as the rest of the site. Share counts and per-share figures are shown to four decimals, amounts and percentages to two, so the number you read is never larger than the one that was computed. Each line of the arithmetic is printed under the results using the figures shown above it, so you can check the whole chain by hand.
Why the page gives two share counts
Because not every account can hold a part of a share. If your broker takes fractions, the four-decimal figure is your size. If it only takes whole shares, the whole-share figure is the largest order that still keeps your loss inside the limit you set — the fractional part is what you leave on the table, and the cost line spells out what that order would come to instead.
And because a position is usually added to, not opened from nothing, the optional boxes pool this buy into what you already hold. The stock average calculator on this site does the same pooling from a list of buys you type, and the stock split calculator carries a share count and an average cost through a split in either direction. Here it is the other way round: the new buy is worked out first, then the average cost it produces.
What is counted, and what is not
This page uses only the six numbers you type. Nothing else goes into the arithmetic.
- There is no live quote on this page. The entry price and the stop price are both typed by you. This page never fetches a price, has no connection to a market data source and cannot show you a quote that is not real — if you want the current price of a stock, this is not the place to find it.
- Your stop is not a guarantee. The arithmetic assumes you get out exactly at the stop price. A gap, a trading halt or a fast market can fill you well below it, so the money you actually lose can be larger than the figure on this page. The number here is what the trade is set up to lose, not a cap on what it can lose.
- No word on where the stop should go. This page does not suggest a stop, does not size one from volatility, and takes no view on whether your stop is sensible. The distance from entry to stop is the input that does all the work, and it is yours.
- One trade per run. The page sizes one buy against one stop. It does not check whether this position added to an existing one breaks a limit across your whole account, and it does not track other trades.
- No advice. Nothing here ranks the trade, says whether to take it, or compares it with holding something else. It is division and multiplication on the numbers you supplied.
- Fractional shares: one assumption. The cost of the position and the average cost after the buy are worked on the four-decimal size, which is the size that exactly matches your risk. If you cannot buy fractions, the line under the cost result shows the whole-share order instead, and that order costs a little less than the figure in the box because it buys a little less.
- Not counted: commissions, fees, taxes, spreads, slippage, dividends, currency conversion, margin interest and borrowing costs. There is no field for any of them. If you want a commission inside the arithmetic, add it to your entry price before typing it, and remember that it makes the real risk a little bigger, not smaller.
- Not built: several tickers at once, importing a statement, saving your history, or signing in. There is no account here and nothing is stored.
The result describes the trade you entered — this account, this risk, this entry, this stop. It is not a view on the stock.
Frequently asked questions
What does a position size calculator work out?
How many shares to buy so that a move from your entry price to your stop price costs a chosen percentage of your account. From your four numbers it gives the money at risk, the risk per share, the share count as a four-decimal figure and as whole shares, the cost of the position, what share of the account that uses, and — if you fill in the optional boxes — your average cost per share after the buy.
Is a position sizing calculator the same as a position size calculator?
Yes. Both names mean this tool and the page answers to both, along with "calculate position size" and "stock position size". The arithmetic does not change with the wording: the money at risk divided by the distance from your entry to your stop gives the number of shares.
How do I calculate position size for a stock?
Three steps. Work out the money you are willing to lose: account size times risk percentage, divided by 100. Work out the risk per share: entry price minus stop price. Divide the first by the second. The result is your size in shares. Type those four numbers above and the page does the three steps for you, and prints each one.
Which number do I use as the risk percentage?
Yours, and it is not on this page anywhere. This page has no rule of thumb, no preset and no default, because the right number depends on your account, your plan and how the rest of your money is invested. Type the figure you have already decided on; the page only does the division.
What if my stop is above my entry price?
The page says so and stops. For a long position the stop has to sit below the entry, otherwise the risk per share is negative or zero and there is no size to work out. Rather than quietly using the difference and pretending the two prices were the other way round, the page names the two boxes and asks you to check them.
Should I use the whole-share figure or the four-decimal one?
Whichever your account can hold. If your broker fills fractional shares, the four-decimal figure is exactly the size that matches your risk. If it only takes whole shares, take the whole-share figure — it is the largest order that still keeps the loss inside your limit, and the cost line tells you what it comes to.
Why does a wider stop mean fewer shares?
Because the money at risk is fixed by your account and your percentage. If you allow the price more room to move before you are out, each share can lose more, so fewer shares fit inside the same money. Halve the distance from entry to stop and you double the size; double it and you halve the size.
How does the existing-holding part work?
Fill in the shares you hold and your average cost per share, and the page treats this buy as an addition to that position. It adds the money already in the stock to the cost of this buy, adds the shares you hold to the shares you are buying, and divides, which gives your average cost per share afterwards. If you fill in only one of the two boxes, the page asks for the other one rather than assuming an average cost.
Does the page tell me where to put my stop, or whether to take the trade?
No. The stop distance is yours, and the page takes no position on whether it is a good one or whether the trade is worth taking. It sizes the trade you described, which is arithmetic, and stops there.
Does it account for fees, taxes or slippage?
No, and none of them are hidden inside the figures either. Commissions, fees, taxes, spreads and slippage are all left out, so the real cost of the trade is a little higher than the cost shown here, and the real loss if the stop is hit can be a little bigger than the money at risk shown here. There is no field for any of them, and the page will not pretend to know what your broker charges.
What happens if I change the risk percentage?
The size moves with it, in a straight line. Double the risk percentage and the money at risk doubles, so the share count doubles. Halve it and the share count halves. The risk per share does not move at all, because it only depends on the two prices.
How is this different from the other calculators on this site?
They work on a position you already have; this one works out the buy before you make it. The stock average calculator pools buys into an average cost, the average down calculator shows what one more purchase does to that average, the DCA calculator takes a fixed amount of money per period instead of a fixed risk, the stock profit calculator adds the fees on both sides and the sale, the stock split calculator carries a position through a split, and the dividend calculator and dividend reinvestment calculator work out what your shares pay you. This is the one that answers how many shares to buy in the first place — and then feeds that buy back into your average cost.
Does it work on my phone, and do I need an account?
Yes to the first, and no to the second. The fields stack to a single column on a narrow screen and the results stay inside the width of the page. There is no sign-up, no pop-up and nothing to install: the whole calculation runs in your browser, and your numbers are not sent anywhere.