Concept guide
Options Position Sizing
Position sizing is choosing how many contracts to trade so that the maximum loss fits the account's risk budget.
Size from risk, not premium
Premium collected is not the risk. Sizing from the maximum loss, the account value and a concentration cap keeps a single outcome from dominating the account.
Undefined-risk positions
When the maximum loss is unbounded, the risk-budget calculation cannot produce a number. Use allocation and concentration caps instead, and treat undefined risk as a deliberate choice.
FAQ
- What percentage should I risk per trade?
- A common starting point is 1–2% of the account, but the right number depends on the strategy and the trader.
- Does sizing account for correlation?
- Not by itself; correlated positions can behave like one large position.
Keep going
Scan the supported universe
Rank current candidates with the same calculation engine used on this page.
Open the screener Related strategyCash-Secured Put
Sell a put while holding the cash to buy the shares if assigned.
Read guide Related strategyIron Condor
Sell an out-of-the-money call spread and put spread for defined-risk range income.
Read guide Related strategyBull Put Spread
Sell a put spread to collect credit with defined risk below the market.
Read guide Calculatorposition size calculator
Run the numbers with the shared options calculation library.
Open tool Calculatoroptions profit calculator
Run the numbers with the shared options calculation library.
Open tool