Most blown-up options accounts did not pick bad trades so much as they traded too big. This calculator works out the largest position that stays inside two limits you set in advance: how much of your account one trade is allowed to lose, and how much capital one position is allowed to tie up. Everything runs in your browser; nothing is sent anywhere.
How to use it
- Pick the trade type.
- Set your limits: account size, the percentage of the account you are willing to lose on a single trade, and the most capital you want in any one position. Many traders start with 1% to 2% risk per trade.
- Enter the trade: the debit paid, the spread width and credit, the put strike, premium and stop, or the stock entry and stop.
- Read the suggested size. It is the smaller of what the risk budget allows and what the position limit allows, rounded down. Rounding down is deliberate: it keeps you under your limit rather than slightly over it.
How each trade type is measured
Long option or debit spread. The most you can lose is the debit you pay, so risk and capital are the same number: debit times 100 per contract.
Credit spread or iron condor. The most you can lose is the spread width minus the credit, times 100. For an iron condor, enter the width of one wing and the total credit. Your broker will typically hold that same amount as buying power.
Cash-secured put. The cash you set aside is the strike times 100 per contract. The loss you size against is the drop from your strike to a stop price you choose, less the premium. Enter 0 as the stop to assume the worst case, the stock going to zero. If you never plan to stop out and are happy to own the shares, size against the worst case, not the stop.
Shares with a stop-loss. Risk per share is entry minus stop. Divide your risk budget by that to get the share count. The calculator also shows how many 100-share covered-call contracts that would cover.
Why the position limit matters as much as the risk limit
A tight stop makes the risk budget look generous, but the capital still has to come from somewhere. A $95 cash-secured put ties up $9,500 per contract even if you only plan to lose $500 on it. The position limit stops a small stop-loss from talking you into a concentrated account. If the result is zero, the calculator tells you which limit was breached and how large an account one contract would need.
What the “five max losses in a row” card is telling you
It shows the approximate hit to your account if five trades in a row lose their full risk amount at this size. A loss of 10% needs an 11.1% gain to recover; a loss of 20% needs 25%; a loss of 50% needs 100%. Sizing is how you make sure a normal losing streak stays an annoyance rather than a crisis.
For the reasoning behind these limits, with worked examples for each trade type, read options position sizing: how many contracts should you trade? To see max loss for a specific spread, use the options profit calculator.
Educational use only. This calculator assumes you can exit at the prices you enter; gaps, early assignment and illiquid fills can make real losses larger than the figures shown. It is not advice to buy or sell any security.