Position Size Calculator
Determine the right contract quantity based on your account size, risk tolerance, and strike price.
Frequently Asked Questions
What is position sizing in options trading?
Position sizing determines how many contracts to trade based on your account size and risk tolerance. It helps prevent overexposure to any single trade and protects your portfolio from significant losses.
How much should I risk per trade?
Most traders recommend risking 1-5% of your account per trade. Conservative traders stay at 1-2%, while more aggressive traders may go up to 5%. Never risk more than you can afford to lose.
How do I calculate position size for cash-secured puts?
For CSPs, calculate position size by dividing your max risk amount by the capital required per contract (strike price x 100). For example, with a $50,000 account at 5% risk ($2,500) and a $25 strike, you can sell 1 contract ($2,500 / $2,500 = 1).