Position Size Calculator

For options, use the premium price as your entry price and calculate risk per contract. Since 1 option contract = 100 shares (in most cases), multiply your position size by 100. Set stop loss based on premium price, not underlying price. Remember: options can expire worthless, so factor theta decay into your stop loss.

Fixed percentage (like 2% rule) keeps risk constant regardless of edge. Kelly Criterion adjusts position size based on your statistical advantage - higher win rate and better R:R means bigger positions. Kelly maximizes geometric growth but can be volatile. Most pros use "Half Kelly" (50% of Kelly suggestion) for more stable equity curves.

Portfolio heat is the total amount you're risking across ALL open positions. If you have 5 trades each risking 2%, your portfolio heat is 10%. The danger: correlated positions can all hit stop losses simultaneously, causing massive drawdowns. Professional traders keep portfolio heat under 10-12% maximum.

No. This is a common trap that destroys accounts. Your "conviction" is often just overconfidence. The market doesn't care about your feelings. Successful traders treat every setup the same and let their edge play out over hundreds of trades. Consistency > conviction.

Volatile stocks require wider stop losses, which automatically reduces your position size. This is correct - you should have fewer shares of a volatile stock versus a stable one for the same rupee risk. Use ATR (Average True Range) to set stops at 2x or 3x ATR, then calculate position size accordingly.

Absolutely! Intraday traders often use tighter risk percentages (0.5-1% per trade) since they take multiple trades daily. Calculate position size the same way but remember: intraday trades have zero overnight risk but higher friction costs (more commissions and slippage).