The position sizing formula
Quantity = (Capital × Risk %) ÷ |Entry − Stop loss|Position sizing decides how big each trade is so that no single loss can seriously damage your account. You fix the rupee amount you are willing to lose first, then let the distance to your stop loss decide the quantity. A wide stop means a smaller position; a tight stop allows a bigger one.
Worked example
With ₹5,00,000 capital and 1% risk, you can lose ₹5,000 on the trade. You buy at ₹250 with a stop at ₹245, so each share risks ₹5. ₹5,000 ÷ ₹5 = 1,000 shares, a ₹2,50,000 position. If the target of ₹265 is hit you make ₹15,000 — a 1 : 3 risk-reward.
Short trades
For a short sell, put the stop loss above the entry. The calculator uses the absolute distance, so the quantity works the same way in both directions.
Frequently asked questions
What percentage of my capital should I risk per trade?
Most professional traders risk 0.5% to 2% of their account on a single trade. At 1% risk, you would need 100 consecutive losing trades to lose everything, which gives you room to survive a bad streak.
Does this work for futures and options?
Yes. Enter the lot size and the calculator rounds the quantity down to whole lots. For options, use the option premium as your entry and stop loss, not the underlying price.
Why does the calculator round down instead of up?
Rounding up would make you risk more than you planned. Rounding down keeps the actual risk at or below your limit.
What if the position needs more capital than I have?
The calculator warns you when the position value exceeds your capital. With a very tight stop, the risk-based size can be larger than you can afford without leverage; reduce the size or widen the stop.
Results are estimates for educational purposes only and are not investment, tax or financial advice. Verify figures with your broker or advisor before acting on them.