Stock Position Size Calculator: How Many Shares to Buy
Before you place an order for Apple, Nvidia, or any other stock, the key question isn't how many can I afford — it's how many should I buy to protect my capital. This calculator applies Alexander Elder's 2% rule from Trading for a Living (1993): never risk more than 2% of your account on a single trade. Enter your capital, entry price, stop-loss, and risk percentage to instantly find how many shares to buy, capital deployed, and your maximum dollar loss. Works for NYSE, NASDAQ, IBEX, Merval, or any market.
Shares to buy = (Capital × Risk%) / (Entry Price − Stop Price). Example: $20,000 capital, 1% risk ($200), entry $150, stop $145 → 200 ÷ 5 = **40 shares** ($6,000 deployed, $200 max loss). Never risk more than 2% of capital on a single trade (Elder's rule).
When to use this calculator
- How many NVDA shares to buy with a technical stop and 1% risk.
- Sizing a breakout trade with a wide stop without overexposing.
- Keeping any single position within 20% of your portfolio.
- Applying Elder's 2% rule consistently across every trade.
- Comparing tight vs. wide stops and their effect on share count.
Example: $20,000 capital, 1% risk, entry $150, stop $145
- Risk amount = $20,000 × 1% = $200.
- Risk per share = $150 − $145 = $5.
- Shares to buy = $200 ÷ $5 = 40 shares.
- Capital deployed = 40 × $150 = $6,000 (30% of portfolio).
- If stop is hit: loss = 40 × $5 = $200 (exactly 1% of capital).
How it works
2 min readThe Position Sizing Formula
Shares = (Capital × Risk%) / (Entry Price − Stop Price)This is the universal position sizing formula used by professional traders. It answers: given a fixed dollar risk, how many shares can I buy before my stop-loss triggers?
Alexander Elder's 2% Rule
In Trading for a Living (1993), Alexander Elder established two rules that protect traders from catastrophic losses:
With 3 trades at 2% each you hit the limit — this forces selectivity.
Quick-Reference Table: Shares to Buy
| Capital | Risk % | Risk $ | Entry | Stop | Distance | Shares |
|---|---|---|---|---|---|---|
| $10,000 | 1% | $100 | $50 | $48 | $2 | 50 |
| $10,000 | 2% | $200 | $50 | $48 | $2 | 100 |
| $20,000 | 1% | $200 | $150 | $145 | $5 | 40 |
| $50,000 | 1% | $500 | $200 | $190 | $10 | 50 |
| $100,000 | 2% | $2,000 | $500 | $480 | $20 | 100 |
Risk Table by Capital (max dollar risk at 1% and 2%)
| Capital | 0.5% | 1% | 2% |
|---|---|---|---|
| $5,000 | $25 | $50 | $100 |
| $10,000 | $50 | $100 | $200 |
| $25,000 | $125 | $250 | $500 |
| $50,000 | $250 | $500 | $1,000 |
| $100,000 | $500 | $1,000 | $2,000 |
| $500,000 | $2,500 | $5,000 | $10,000 |
Common Mistakes to Avoid
1. Deploying all available capital: a 30% drawdown can wipe a concentrated position.
2. Stops too tight: if your budget is small, don't force trades — normal volatility will trigger the stop.
3. Averaging down: doubles your risk on a losing position instead of spreading it.
4. Ignoring commissions: 0.3–0.6% round-trip in Argentina, 0–0.1% in the US.
5. Using risk % as portfolio %: they are different. A tight stop = small portfolio %, same risk %.
Complementary tools: Risk/Reward Ratio · Kelly Criterion · Maximum Drawdown
> ⚠️ Educational calculator only. Not financial advice. Markets carry risk of total loss. Consult a licensed financial advisor before trading.
Frequently asked questions
What is the position sizing formula for stocks?
Shares to buy = (Capital × Risk%) / (Entry Price − Stop Price). Example: $20,000 capital, 1% risk = $200 risk budget; entry $150, stop $145 = $5 risk per share → buy 40 shares.
What is Elder's 2% rule?
Never risk more than 2% of your total trading capital on a single trade. With a $10,000 account, that's a maximum loss of $200 per trade. Elder also adds a 6% monthly rule: stop trading if total open-position losses exceed 6% in a month.
Does this calculator work for US and international stocks?
Yes. The formula is market-agnostic and currency-agnostic. Just use the same currency consistently across capital, entry price, and stop price. Works for NYSE, NASDAQ, IBEX, Merval, BYMA, TSX, and any other market.
What if I don't use a stop-loss?
Without a defined stop-loss there is no rational position size. At minimum, estimate a mental stop of 10–20% below entry to use this calculator. Trading without a stop is one of the leading causes of account blowups.
Should I include commissions in the calculation?
Yes. Add estimated round-trip commissions to your risk amount. In Argentina expect 0.3–0.6% per leg; in the US expect 0–0.1% with most brokers. For smaller accounts, commissions can eat a significant portion of your 1–2% risk budget.
What if my position size comes out to fractional shares?
Always round down to whole shares if your broker does not support fractional shares. This keeps your actual risk equal to or slightly below your target. Brokers like Interactive Brokers and Robinhood do support fractional shares for US stocks.
Can a single stock be more than 20–30% of my portfolio?
It can happen with a very tight stop. However, best practice is to cap any single position at 20% of capital to protect against gap risk (when a stock opens far from the previous close, skipping past your stop). A tight stop with large portfolio % is a warning sign.
How do I track the 6% total open risk rule?
Add up the maximum dollar loss of every open position (acciones × distance to stop). Divide that total by your capital. If it reaches 6%, do not open new positions until existing trades close or their stops move to breakeven.
What is the difference between risk % and portfolio %?
Risk % is the percentage of capital you could lose if the stop is hit — what you control. Portfolio % is the percentage of capital deployed in the position — how much you bought. A tight stop means you can buy fewer shares, so portfolio % is lower even with the same risk %.
Does position sizing work the same for ETFs, options, and futures?
For ETFs and individual stocks, this formula applies directly. For options, the 'stop' is typically the full premium paid. For futures, adjust for contract multiplier. The underlying principle — risk a fixed % per trade — is universal across all instruments.