Position Size Calculator
Set how much of your portfolio you're willing to risk, and this converts your entry and stop into a share count and dollar position. A risk cap, not a recommendation.
Are these calculators investment advice?
No. They do arithmetic. AlphaLens does the research. Every decision is yours.
Do the calculators store my portfolio?
Calculator inputs at /tools/ are processed in the browser. They are not treated as an account profile.
How to read this number
The share count is the largest position that keeps your dollar risk — what you'd lose if the stop is hit — at or below your chosen percentage of the portfolio. It is not a signal to enter the trade. It only answers "if I take this trade with this stop, how many shares keeps my risk in check?"
Formula & assumptions
Worked example
A $100,000 portfolio, willing to risk 1% per trade, buying at $50 with a stop at $45.
The trade uses 10% of the portfolio's capital, but the actual dollar risk if the stop is hit is capped at $1,000 — 1% of the portfolio, exactly as planned.
Common mistakes
- Confusing position size with risk. A 10% position isn't automatically a 10% risk — in the example above it's a 1% risk, because the stop is only 10% below entry. Risk depends on where the stop is, not how much capital is deployed.
- Picking the stop to hit a target share count. The stop should sit where the investment thesis is actually wrong, not wherever produces a "nice" number of shares — reverse-engineering the stop defeats the purpose.
- Widening the stop after entry. Giving a losing position "more room" after the fact quietly increases real dollar risk past the original 1% plan.
- Sizing up on conviction instead of the fixed risk percentage. A risk cap only works as a cap if it's applied the same way on every trade, including the ones that feel obvious.
Common questions
How do you calculate position size?
Decide how much of your portfolio you are willing to risk on the trade, divide that dollar risk by the per-share risk (entry price minus stop price), and the result is how many shares to buy.
What is a good risk percentage per trade?
There is no single right answer. Many risk-conscious traders cap risk per trade well below their total portfolio, but the right number depends on conviction, volatility, and overall portfolio risk.
What is a stop price used for in position sizing?
The stop price defines your per-share risk. The gap between entry and stop, multiplied by shares held, is the dollar amount you are risking if the stop is hit.
Go deeper
Want to see how this position fits the rest of your holdings? Run Portfolio Risk & Fit in AlphaLens.
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