Position size from a stop, not a vibe

The only question the tool answers

The position size calculator asks: if this stop hits, how many whole units can I hold so the loss is about R percent of my account. That is one risk model among many. It is not Kelly, not volatility targeting, and not your broker’s margin calculator.

Formula, long: risk amount = account x (risk percent / 100). Risk per unit = entry - stop. Size = floor(risk amount / risk per unit). Short: risk per unit = stop - entry. If the stop is on the wrong side of the market, size is zero. We do not invent a stop for you.

A concrete example

Account 50,000. Risk 0.5 percent. Long entry 100, stop 97. Risk amount is 250. Risk per unit is 3. Size is 83 shares. Notional is 8,300. If the stop is clean, you lose about 249, plus commissions and slippage the tool ignores.

Change the stop to 99 and size jumps because the tool thinks you are risking 1 per share. That is mathematically honest and practically dangerous: a one-point stop on a name that moves two points in the open is not a 0.5 percent risk. The calculator cannot see that. You can.

What we leave out on purpose

Commissions, fees, borrow, overnight financing, FX conversion, and taxes. Flooring to whole units (no fractional shares, no 0.1 futures). Margin and notional limits. Correlation: two “0.5 percent” names that are the same bet are not 1 percent risk; they are one idea twice.

Stops that do not fill. A stop is an order type, not a promise. Gaps through the stop are how people discover that R was a wish.

How this ties to the wire

A brief with a delayed last can deep-link into the P&L tool with a percent move. Position size is the next question: given that move as a stop distance, what size keeps the loss inside a budget. Do not paste a delayed ETF last into a futures account without converting contract multiplier and currency.

If you only remember one desk habit: pick the stop first, then size. Size first and a stop later is how accounts leak. The calculator is ordered that way for a reason.

When not to use it

Options (you need delta, not share count). Spreads and pairs. Illiquid names where the stop is theater. Any book that is already at max loss for the week. The tool will still emit a number. The number will still be wrong for the job.