Use our Stock Position Size Calculator to help avoid the total destruction of your portfolio with a single trade. Our calculator will help you find the proper number of shares to buy or sell in order to maximize your return and limit your risk.
Stock Position Size Calculator Results Explained
Our position sizing calculator has a simple formula that’s time-tested. The number of units shows the amount of shares to invest in. The position value is the number of units times the entry price. The equity at risk shows the risk percentage times total investable assets. The stop price is one minus the trailing stop (TS) percentage times the entry price.
The stock position size calculator also lets you calculate results for shorting stocks and option positions. You can use the symbol type dropdown to select options. This brings up selections for more detailed trading. Trading options can become complex quickly and you should do more research if you’re new to them.
Position Sizing Rule of Thumb
Wealthy Retirement recommends putting no more than 4% of your equity portfolio in any single stock.
It’s a good policy stop stocks falling more than 25% below the purchase price without selling it. That’s why we often recommend a 25% trailing stop. That way if you take a maximum loss of 25% on your maximum position size of 4%, the value of your portfolio has fallen only 1%.
Of course, there is more to risk management than just using a stock position size calculator (this includes proper stock selection and asset allocation). If you’re interested in learning more about investing and retirement planning, check out the calculators and articles below.