Position Sizing Calculator
Estimate whole shares for a planned long position using a chosen portfolio risk budget and a price based capital limit.
Earlier editorial review
- Reviewed
- 2026-09-25
- Methodology
- 1.1
Sources
How position sizing works
Enter a positive portfolio value, a chosen risk percentage from 0 to 100, an entry price, and a lower stop price. The calculator turns the risk percentage into a planned loss budget, then compares the shares allowed by that budget with the shares affordable at the entered price.
It rounds both share limits down to whole shares and uses the smaller count. This is a long, unleveraged stock example. A zero share result is valid when the budget or available capital cannot cover one whole share.
The result is a planning estimate based on the entered prices. A stop price is a trigger, not a guaranteed execution price. Gaps, slippage, fees, partial fills, or a different execution price can make the realized loss larger or smaller than the planned amount.
The calculation does not choose a risk percentage or decide whether a trade suits your circumstances. Consider the full portfolio, correlated positions, liquidity, and your ability to absorb losses when setting assumptions.
Step by step
- Enter the portfolio value, risk percentage, entry price, and lower stop price.
- Review whole shares, estimated cost, planned risk, and portfolio percentages.
- Adjust one input at a time to compare position sizes under different assumptions.
Worked examples
With a portfolio value of 100,000, a 1% risk budget, an entry price of 50, and a stop price of 45, risk per share is 5 and the budget is 1,000. The risk limit allows 200 whole shares. Estimated cost is 10,000 and planned risk is 1,000, or 1% of the portfolio.
With a portfolio value of 1,000, a 100% risk budget, an entry price of 100, and a stop price of 99, the risk limit allows 1,000 shares but the capital limit allows only 10. Estimated cost is 1,000 and planned risk is 10. The unit tests check both examples.
When to use this calculator
Use it to estimate an unleveraged whole share count for one planned long stock position from a selected risk budget and entry to stop distance.
Use a broader portfolio analysis for multiple positions, short sales, options, borrowing, or several currencies.
Common interpretation errors
Do not read planned risk as a guaranteed loss cap. The actual execution price may differ from the stop price, and costs can change the result.
Do not apply the same full portfolio risk budget separately to several correlated positions without considering their combined exposure.
Formula and units
Risk budget = Portfolio value × Risk percentage ÷ 100
Risk per share = Entry price − Stop price
Risk limited shares = floor(Risk budget ÷ Risk per share)
Capital limited shares = floor(Portfolio value ÷ Entry price)
Shares = min(Risk limited shares, Capital limited shares)
Planned risk = Shares × Risk per share
The model assumes a long stock position without borrowing and whole shares. The capital limit keeps estimated purchase cost at or below the entered portfolio value. Planned risk uses the entry to stop price difference and does not guarantee a maximum loss.
Assumptions and limitations
This is a long stock calculation with a lower stop price, no borrowing, and whole shares. It excludes commissions, taxes, bid ask spread, partial fills, gaps, and execution differences. A stop price is not a guaranteed fill. Planned risk is not a maximum loss, and this calculation does not assess whether a trade is suitable.
Key terms
- Risk budget
- The selected percentage of portfolio value converted into a planned loss amount for this calculation.
- Risk per share
- The entry price minus the stop price for one share in the modeled long position.
- Capital limit
- The whole share count affordable when the entered portfolio value is divided by the entry price.
Compare related tools
Risk Reward Ratio compares a planned target with the distance to a stop. Maximum Drawdown describes a historical portfolio loss path. They answer different questions and do not validate this share estimate.
Use other portfolio measures when several positions share risks or when the position includes leverage, short sales, options, or multiple currencies. This calculator covers one long stock position only.
FAQ
What does position sizing calculate?
It estimates a whole share count from a chosen portfolio risk budget, the difference between entry and stop prices, and the amount affordable from the entered portfolio value. It is a planning estimate, not a trade recommendation.
How are the shares calculated?
The calculator divides the risk budget by the entry to stop price difference and rounds down. It also divides portfolio value by entry price and rounds down. The smaller of those two share counts is used.
What risk percentage should I choose?
There is no universally appropriate percentage. It depends on your financial circumstances, portfolio concentration, correlated positions, liquidity, and ability to bear loss. The calculator accepts a chosen value from 0 to 100 but does not recommend one.
Does a stop price cap my loss at the planned amount?
No. A stop order is triggered when its stop price is reached, but the execution price can differ, especially in a fast or gapping market. Fees and other costs can also affect the realized result.
Why can the calculator return zero shares?
Zero is a valid result if the risk budget allows less than one share or the portfolio value cannot cover one whole share at the entry price. A zero risk percentage also produces zero shares.
Related tools
Compare planned target and stop distances with Risk Reward Ratio, review portfolio loss history with Maximum Drawdown, or examine other portfolio measures when risks overlap.