Stock Position Sizing Calculator
Compute max position size from account size, max risk %, entry price, and stop-loss. Risk-per-trade math for active traders.
Stock Position Sizing Calculator
Compute the maximum number of shares you can buy while limiting your loss to a fixed percentage of account size if the stop-loss hits. This is fixed-fractional sizing: the same share of the account is put at risk on every trade, and the share count is rounded down so the risk never exceeds it.
Risk-per-trade table (same entry + stop, different risk %)
| Risk % | $ at risk at the stop | Shares | Position $ |
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How to Use the Position Sizing Calculator
Enter your account size
Your total trading capital. Use the equity number from your broker's daily statement.
Set max risk per trade
The "1% rule" and "2% rule" are rules of thumb, not standards. Choose the loss you could take several times in a row: the table under the result shows the same trade at 0.5% to 5%, and the facts below show what a run of losses costs at each.
Enter entry and stop-loss prices
Entry is where you plan to buy (or short). Stop-loss is the price at which you exit for a loss — set this based on technical analysis (below support, above resistance) or volatility-based (1-2× ATR). The distance between entry and stop is your "risk per share".
Optional: enter target price for reward:risk
Target is where you plan to take profit. The reward:risk ratio R sets the win rate at which the trade only breaks even, before costs: 1 ÷ (1 + R). At 2:1 that is 33.3%, at 1.5:1 40%, at 1:1 50%. The result line prints it for your numbers. If you trade SGX stocks, set the lot size to 100.
Position Sizing — How Much a Run of Losses Costs
Why Size Matters as Much as Selection
Selection decides how often you are right; sizing decides what being wrong costs. A trader who wins 60% of trades but risks 25% of the account on each can still be ruined: any given three trades all lose with probability 0.4 × 0.4 × 0.4 = 6.4%, and three losses at 25% leave 0.75³ = 42.2% of the account — a 57.8% drawdown. Risking 1% instead, the same three losses cost 2.97%.
The formula: shares = (account × risk%) ÷ |entry − stop|, rounded down. At a 100,000 account, 1% risk is a 1,000 budget; with entry at 50 and stop at 47 the risk per share is 3, so 1,000 ÷ 3 = 333.3 rounds down to 333 shares. Those shares risk 333 × 3 = 999 at the stop — never more than the budget — and cost 333 × 50 = 16,650, or 16.65% of the account. On SGX, where the board lot has been 100 units since 19 January 2015, the same trade is 3 lots: 300 shares risking 900. The share of the account deployed is a by-product; the discipline is the amount at risk.
The 1% Rule, 2% Rule, and Kelly Criterion
The 1% rule — risk no more than 1% of the account on one trade — is the most-quoted guideline, and the 2% rule its more aggressive cousin. The arithmetic behind them: on a strategy that wins half the time, any given five trades all lose with probability 0.5⁵ = 3.1%, and five losses at 1% cost 4.9% of the account (0.99⁵ = 0.951). At 5% per trade the same streak costs 22.6% and needs a 29.2% gain to recover. The risk percentage does not create or destroy an edge — that is set by the win rate and the reward:risk — it sets how deep the drawdowns are on the way.
The Kelly criterion (J. L. Kelly, Bell System Technical Journal, July 1956) gives the fraction of capital that maximises long-run growth when the odds are known. For win probability p and payoff ratio b it is f* = (p × b − q) ÷ b with q = 1 − p; at even money it reduces to p − q, the form in Kelly's paper. A 55% win rate at 2:1 gives 32.5% of capital. Real win rates are estimated, not known, and betting more than Kelly lowers growth, so a fraction of it — a quarter to a half, 8.1% to 16.25% here — is a common hedge against overestimating the edge. Note that Kelly sizes the capital committed to a bet that can be lost entirely; the risk-per-trade percentage above is the amount lost at the stop, a different quantity.
The stop decides how much a trade can lose; the size decides whether you can afford to be wrong several times in a row.
Stop-Loss Placement — The Other Half of the Equation
Position sizing is only as good as the stop-loss it's based on. Three common approaches: technical stops (below recent support, above recent resistance, below moving averages) — appropriate for swing trading and trend-following; volatility-based stops (1-2× ATR or Average True Range) — appropriate when entry is near consolidation breakouts where price-action structure is unclear; fixed-percentage stops (5%, 7%, 10% below entry) — simplest, but doesn't adapt to per-stock volatility. The position-sizing math works for any stop strategy as long as the stop is mechanical and respected.
The trap most retail traders fall into: moving the stop-loss after entering. Once a position is in red, the temptation is to widen the stop to "give it more room" — which converts a controlled-risk trade into an uncontrolled-risk position. The discipline of position sizing depends on respecting the stop, so place it as an order rather than managing it by hand; many brokers offer bracket or OCO (one-cancels-other) orders that set stop and target together at entry. One limit no order removes: a stop order becomes a market order when triggered, and a stock that gaps through the stop overnight fills at the next price available, so the risk at the stop is a plan, not a guarantee. That is one reason to keep any single position well short of the whole account.
Five losses at 1% cost 4.9%; at 5% they cost 22.6% and need 29.2% back
The risk-per-trade formula: shares = (account × risk%) ÷ |entry − stop|, rounded down so the risk never exceeds the budget.
1% rule: risk no more than 1% of the account on any single trade — the most-quoted rule of thumb, not a regulation.
2% rule: the same idea with a looser cap. Ten losses at 2% cost 18.3% of the account.
Kelly criterion (Kelly, 1956): f* = (p × b − q) ÷ b — growth-optimal only when p is known; fractions of it are the usual hedge.
SGX board lot: 100 units, cut from 1,000 on 19 January 2015. Set the lot size to 100 and the shares round down to whole lots.
A 5-trade losing streak at 1% risk = 4.9% drawdown (0.99⁵ = 0.951).
The same 5-trade losing streak at 5% risk = 22.6% drawdown — and a 29.2% gain to get back.
Break-even win rate = 1 ÷ (1 + R): 33.3% at 2:1, 40% at 1.5:1, 50% at 1:1 — before costs.
ATR (Average True Range) is a common volatility-based stop input — typically 1-2× daily ATR for swing trades.
The FINRA pattern day trader rule and its $25,000 minimum were replaced by intraday margin standards from 4 June 2026; brokers have until 20 October 2027 to switch (Regulatory Notice 26-10).
Frequently Asked Questions
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Shares = (Account × Risk%) ÷ |Entry − Stop|, rounded down. The amount you are willing to lose if the stop is hit, divided by the loss per share. At a 100,000 account, 1% risk is a 1,000 budget; with entry 50 and stop 47 the risk per share is 3, so 1,000 ÷ 3 rounds down to 333 shares, risking 999. With 100-share lots, as on SGX, it is 300 shares. The same arithmetic works for ETFs, futures and currencies once "risk per share" becomes the loss per contract or per unit at the stop.
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There is no standard; the 1% and 2% figures are rules of thumb. A useful test is the losing streak you could sit through: ten losses in a row cost 9.6% of the account at 1% risk and 40.1% at 5% — and after a 40.1% loss you need a 67% gain to get back. Long losing streaks are not rare over hundreds of trades, so size for the streak, not the next trade.
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Start smaller than you think, and raise it only once your record is long enough to trust its win rate. The arithmetic: at 1% risk, a 60% win rate and 2:1 reward:risk, each trade is worth on average 0.6 × 2% − 0.4 × 1% = 0.8% of the account — so how fast that compounds depends on how many trades you take, and on the win rate being real rather than aspirational. Doubling the risk doubles that expectation and roughly doubles the drawdowns with it.
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Three canonical approaches: (1) Technical — below recent support, below moving averages, below trend lines. Appropriate for swing trading. (2) Volatility-based — 1-2× ATR (Average True Range) below entry. Adapts to per-stock volatility. (3) Fixed-percentage — 5%, 7%, 10% below entry. Simplest. The wrong approach is "wherever feels comfortable" — that produces inconsistent risk and corrupts the position-sizing math. Use a single method consistently.
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J. L. Kelly's 1956 paper in the Bell System Technical Journal showed the fraction of capital that maximises the long-run growth rate when the odds are known: f* = (p × b − q) ÷ b, which at even money is simply p − q. For a 55% win rate at 2:1 it gives 32.5%. Because real win rates are uncertain and betting above f* reduces growth, traders often use a fraction of it — a quarter to a half gives 8.1% to 16.25% here. That is still far above a 1% risk-per-trade rule, because Kelly sizes the capital committed to a bet that can be lost in full, while risk-per-trade measures only the loss at the stop.
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The ratio sets the win rate you need just to break even, before costs: 1 ÷ (1 + R). At 2:1 that is 33.3%; at 3:1, 25%; at 1:1, 50%; at 0.67:1, 60%. A low ratio is not wrong in itself — some strategies win often and small — but it needs a correspondingly high win rate, and costs take a larger share of each small win. The result line prints the break-even win rate for your entry, stop and target.
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Yes, but with delta-adjustment. For buying options outright: risk per contract = premium paid (since options can go to zero); position sizing should treat max risk as the premium total. For selling defined-risk spreads (credit/debit spreads, iron condors): max loss is bounded, use that as risk-per-position. For naked options or futures: position sizing should treat the contract's notional exposure × stop-percentage as the risk. The 1-2% account-risk principle applies the same way — adapt the formula's "risk per share" denominator to the option's defined max loss.
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It is being retired. Under the old FINRA Rule 4210 provisions, a customer who made four or more day trades within five business days — provided they were more than 6% of the margin account's trades in that period — was a "pattern day trader" and had to keep at least $25,000 of equity in the account. FINRA Regulatory Notice 26-10 (20 April 2026) replaces those requirements in their entirety with intraday margin standards: the day-trade count, the pattern-day-trader designation and the $25,000 minimum go, and firms instead monitor margin deficits during the day. The amendments took effect on 4 June 2026, but firms that need more time may phase them in until 20 October 2027, so your broker may still apply the old rule — check its notice. The rule only ever applied to margin accounts at FINRA member firms; a cash account still has to wait for settlement, which in the US has been one business day (T+1) since 28 May 2024.
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The arithmetic is the same; lot sizes and costs differ. On SGX the board lot has been 100 units since 19 January 2015, so set the lot size to 100 and the share count rounds down to whole lots. Singapore charges no stamp duty on ordinary scripless SGX trades: IRAS treats the CDP's electronic transfer as exempt and remits share duty on contracts for the sale of scripless shares. Brokerage and SGX clearing and trading fees still apply, which makes very small positions uneconomic. Hong Kong charges stamp duty of 0.1% on every bought note and every sold note. The FINRA pattern-day-trader rule never applied to SGX trades.
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Three considerations. (1) Margin rules: US day-trading margin is moving from the pattern-day-trader rule to FINRA's intraday margin standards (effective 4 June 2026, phase-in to 20 October 2027). Which rules apply to you depends on the entity that carries your account and on how far your broker has moved, not on where you live — check your broker's notice. (2) Withholding tax: US-source dividends paid to non-resident aliens are withheld at 30% unless a tax treaty lowers the rate, and the IRS list of US income tax treaties includes neither Singapore nor Malaysia, so residents of both face the full 30% on US dividends. Capital gains are generally not subject to that withholding for non-residents. (3) Currency: converting SGD or MYR to USD carries a spread or fee that varies by broker; on short holding periods it can matter, so treat the currency as a separate exposure.
Method & sources
How it computes
Shares = floor(account × risk% ÷ |entry − stop|), then down to whole lots; computed in integer units (prices in 1/10,000, account in cents, risk in basis points) so no float rounding loses a share. Risk at stop = shares × |entry − stop|, never above the budget. Reward:risk R = |target − entry| ÷ |entry − stop|; break-even win rate = 1 ÷ (1 + R). Kelly f* = (p × b − q) ÷ b (RecaInvest.positionSize).
What this tool implements
- Shares are rounded DOWN, and down again to whole lots (SGX board lot 100 units since 19 January 2015), so the amount lost at the stop never exceeds the budget; the page prints both the budget and the risk actually taken (1,000 and 999 on the defaults).
- Exact arithmetic: prices in 1/10,000 units, account in cents, risk in basis points — every product an integer under 2^53. In floating point 1,000 ÷ 0.1 is 9,999.999…, and the old page bought one share fewer than the budget allowed.
- Refused rather than guessed: a stop equal to the entry (no risk per share), a negative stop, a zero entry, risk outside 0.01%–100%, an account outside (0, 1,000,000,000], a fractional or zero lot. A target on the wrong side of entry is reported as such, not as a "poor" ratio.
- The risk at the stop is a plan, not a guarantee: a triggered stop order fills at the next available price and a gap can fill it through the stop; the page says so.
- FINRA pattern-day-trader rule: under the old Rule 4210 provisions, four or more day trades in five business days, if more than 6% of the margin account's trades, made a "pattern day trader" subject to a $25,000 minimum. FINRA Regulatory Notice 26-10 replaces those requirements with intraday margin standards, effective 4 June 2026, with a phase-in to 20 October 2027 (also SEC investor.gov).
- US-source dividends paid to non-resident aliens are withheld at a statutory 30% unless a treaty reduces it (IRS); the IRS A-to-Z list of US income tax treaties includes neither Singapore nor Malaysia.
Sources
- FINRA. Regulatory Notice 26-10, FINRA Adopts New Intraday Margin Standards to Replace the Day Trading Margin Requirements, 20 April 2026 — effective 4 June 2026, phase-in to 20 October 2027: https://www.finra.org/sites/default/files/2026-04/Regulatory-Noti…
- U.S. Securities and Exchange Commission (investor.gov). Pattern day trader — the transition to intraday margin requirements: https://www.investor.gov/introduction-investing/investing-basics/…
- U.S. Securities and Exchange Commission. SEC Finalizes Rules to Reduce Risks in Clearance and Settlement (T+1), press release 2023-29 — compliance date 28 May 2024: https://www.sec.gov/newsroom/press-releases/2023-29
- Singapore Exchange. More retail activity in higher-priced stocks after SGX cuts board lot size, 19 January 2015 — board lot 100 units: https://links.sgx.com/1.0.0/corporate-announcements/2BYH9E59ZOE17…
- Internal Revenue Service. Withholding on specific income. https://www.irs.gov/individuals/international-taxpayers/withholdi…
- Internal Revenue Service. United States income tax treaties — A to Z. https://www.irs.gov/businesses/international-businesses/united-st…
- Inland Revenue Authority of Singapore. Stamp Duty Basics for Shares. https://www.iras.gov.sg/taxes/stamp-duty/for-shares/basics-of-sta…
- Government of Hong Kong. Stamp duty rates. https://www.gov.hk/en/residents/taxes/stamp/stamp_duty_rates.htm
What can make this go out of date
- Nothing is fetched: account, risk, prices and lot size are entered by the user.
- Regulatory lines are dated: the FINRA intraday-margin phase-in ends 20 October 2027, after which the transition wording should be removed.
Abridged — the full review record for this tool runs longer than the list above.
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