Position size calculator
Decide how many shares or units to trade so that, if your stop-loss is reached, the loss equals a fixed share of your capital. Enter your numbers below — everything is computed in your browser.
Result
Formula v1.0.0: quantity = floor( (capital × risk%) ÷ |entry − stop| ) rounded down to your lot multiple, so the actual risk never exceeds your budget.
How position sizing works
Risk-based position sizing turns a chosen risk budget into a quantity. The risk budget is a percentage of your capital (many learners use 1% or 2%). The per-unit risk is the distance between your entry price and your stop-loss. Dividing the budget by the per-unit risk gives the quantity, which is then rounded down to your lot or share multiple so the realised risk never exceeds the budget.
Reward-to-risk
If you add a target price, the tool shows the reward-to-risk ratio — the distance to the target divided by the distance to the stop. It is a description of the two distances you entered, not a forecast and not a suggestion to take any trade.
What it does not do
It does not tell you where to place a stop, what to buy or sell, or whether a trade is suitable for you. Market gaps, slippage and partial fills mean the actual loss can differ from the budgeted figure.
Position sizing FAQ
How do I calculate position size from risk per trade?
Position size in shares equals the rupee amount you are risking on the trade divided by the per-share stop-loss distance (entry price minus stop-loss level). For example, risking Rs 5,000 with a Rs 25 per-share stop distance gives 5,000 / 25 = 200 shares. The rupee risk itself is typically derived as a chosen percentage of total trading capital.
What is the 1% / 2% rule in position sizing?
The 1% / 2% rule is a convention where the rupee amount risked on a single trade is capped at 1% or 2% of total trading capital, defining the loss taken if the stop-loss is reached. On Rs 5,00,000 of capital, a 1% rule sets per-trade risk at Rs 5,000 and a 2% rule at Rs 10,000. It is a capital-allocation formula and does not predict outcomes.
How does the stop-loss distance affect quantity?
For a fixed rupee risk, quantity is inversely proportional to the per-share stop-loss distance, since quantity equals rupee risk divided by that distance. A wider stop distance produces a smaller share count, while a narrower stop distance produces a larger one. Doubling the stop distance halves the calculated quantity for the same risk budget.
What is reward-to-risk ratio and how is it calculated?
Reward-to-risk ratio compares the per-share distance from entry to a target against the per-share distance from entry to the stop-loss, expressed as a multiple such as 2:1. It is computed as (target price minus entry price) divided by (entry price minus stop-loss level) for a long position. The ratio is a description of the trade's geometry, not a forecast of which level is reached.
How is position size calculated for NSE F&O contracts that trade in lots?
In NSE F&O, instruments trade in fixed lot sizes, so the share-based quantity from the risk formula is converted to whole lots by dividing by the lot size and rounding down. If the risk formula allows 240 units and the lot size is 75, that is 240 / 75 = 3.2, which rounds to 3 whole lots. Because lots are indivisible, the realised risk per lot can differ from the exact rupee budget.
What does notional position value mean and how does it differ from risk?
Notional position value is quantity multiplied by entry price, representing the total capital deployed or exposure, whereas risk is quantity multiplied by the per-share stop-loss distance. A trade can have a large notional value but a small defined risk if the stop distance is narrow. The two figures answer different questions: capital committed versus amount exposed to loss at the stop.
NiftyLens provides general educational information and user-input mathematical utilities. It does not provide personalised investment advice, research recommendations, trade calls, price targets or suitability assessments. Market-calendar, settlement and transaction-cost information may change and should be verified against current official exchange, clearing, broker, depository and tax records. Trading and investing involve risk; you remain responsible for your own decisions and should seek appropriately qualified professional advice where needed.