Use this free position size calculator to turn your account equity, the percentage you are willing to risk, and your stop-loss into a share count for stocks and ETFs.
How the position size calculator works
Enter your account equity, the percentage of it you will risk on this trade, your entry price and your stop-loss price. The tool works out the risk budget in dollars, the risk per share, and the number of shares that makes those two agree — along with the resulting position value and what percentage of the account it represents.
Size is an output, not an input
The decision order matters more than the arithmetic. You do not choose a position size and then find a stop to fit it; you decide what you will risk, decide where the idea is wrong, and let those two numbers produce the size. Nearly every sizing disaster comes from doing it backwards. A wider stop does not mean more risk — it means a smaller position.
A worked example
On a $25,000 account, risking 1% means a budget of $250. Buying at $100 with a stop at $95 puts the risk per share at $5, so the position is 50 shares — a $5,000 position, or 20% of the account. Now widen the stop to $90. Risk per share doubles to $10, the position halves to 25 shares, and the risk budget is still exactly $250. The exposure changed; the amount at stake did not. That invariant is the entire point.
How to read the results
Check the exposure percentage as well as the share count. A 1% risk budget with a very tight stop can produce a position worth a large share of the account — fine on paper, but it concentrates you in one name and leaves no room for a gap through the stop. If the exposure figure looks uncomfortable, the answer is usually a wider stop and a smaller position, not a smaller risk percentage.
Common mistakes
The first is assuming the stop guarantees the loss. It does not. Gaps, slippage and illiquid opens can all make the realized loss larger than the budget, which is the main argument for keeping the risk percentage small rather than trusting the arithmetic.
The second is sizing each position in isolation. Five positions each risking 1% of a correlated basket is not 1% of risk — it behaves much closer to 5% when the correlation turns out to be 1 in a drawdown.
The third is moving the stop after entry to justify a position that has gone against you. That converts a planned loss into an unplanned one and quietly breaks every number this calculator produced.
Where to go next
The reasoning behind the 1–2% convention, and how professional desks think about sizing, is laid out in position sizing rules for systematic traders. Once you know your size, the question becomes how deep a normal losing run can go — drawdown explained covers that, and the risk of ruin simulator puts a probability on it. For currency pairs, where size comes from pip value rather than a price stop, use the forex position size calculator.
Frequently asked questions
What risk percentage should I use?
Commonly taught ceilings are 1–2% of equity per trade, and many professionals sit below that. This tool takes whatever you enter — it does not recommend a number.
Why does a wider stop mean a smaller position?
Because the risk budget is fixed. If each share can lose more, you can hold fewer shares before hitting the same dollar loss.
Does this work for short trades?
Yes. Put the stop above the entry and the arithmetic is identical; only the direction label changes.
Educational tool, not financial advice. Past and modeled results do not guarantee future performance.
Where to invest: brokers with fractional shares
To act on what this tool shows you, you’ll need a brokerage account. These are established brokers we use that support fractional shares — buying a slice of a share by dollar amount, which makes dollar-cost averaging and diversifying with small amounts easy:
- Robinhood — commission-free investing with fractional shares from $1, and the only major broker offering a daily recurring-investment schedule. Recommended for most beginner-to-intermediate investors who want the simplest way to automate investing — see how to automate your investing for the full setup.
- Charles Schwab — fractional shares of most U.S.-listed stocks and ETFs from $1, commission-free online.
- Fidelity — “Stocks by the Slice” fractional investing from $1, with strong research and low-cost index funds.
Referral disclosure: the broker links above are referral links. If you open and fund an account through them we may receive a referral reward at no cost to you; it never affects our tools or conclusions. This is educational information, not investment advice — choose the broker that best fits your needs.