How the maths works
Position sizing answers one question: what is the largest position I can hold such that being wrong costs me a fixed, acceptable amount? Everything else on this page follows from that sentence.
Loss per contract = |Entry − Stop| × Contract multiplier
Contracts = ⌊ Risk budget ÷ Loss per contract ⌋
If you enter a tick size, the calculator also reports the stop distance in ticks and the value of a single tick, which is tick size × multiplier. That number is what most contract specification tables actually publish as “tick value”, and it is the unit futures traders use to talk about stop placement — a stop is 12 ticks away, not 0.30 index points away.
Why futures sizing is not forex sizing
Most position size calculators online are built for forex, and they show it. They ask for a currency pair, a stop in pips, and they return a lot size. That model does not transfer to futures, for three reasons.
The unit of risk is a tick, not a pip
The minimum price increment is set per contract by the exchange. Two contracts traded side by side can have completely different tick sizes and completely different tick values. A calculator that assumes a standard increment will be wrong on at least one of them.
The multiplier is per product, not a standard lot
Forex has conventions — a standard lot is 100,000 units. Futures has no such convention. One contract might represent 5 index points, 50 index points, 10 tonnes, 100 tonnes or 1,000 barrels. You cannot compute a cash risk without being told the multiplier, which is exactly why this page asks for it as a required field rather than hiding it behind a product name.
Margin is an exchange figure that changes
In forex, leverage is usually a fixed ratio offered by the broker. In futures, the margin requirement is set by the exchange and revised periodically — often raised when volatility rises. A position that uses 20% of your balance at one margin rate can use 40% at the next revision without you changing anything. That is why the calculator reports margin utilisation separately and flags it when it gets high.
What the result actually tells you
Contracts to trade
This is rounded down to a whole contract. Futures contracts are not divisible — you cannot hold 2.7 contracts. The consequence is that your realised risk is almost always slightly below your risk budget, and often noticeably below it when the account is small or the stop is wide. The calculator reports the actual figure rather than the target, because the actual figure is the one that will appear on your statement.
A common failure mode: an account too small for the instrument. If a single contract's loss at your stop exceeds your risk budget, the answer is zero contracts, and no amount of adjusting the stop to fit should override that. Widening a stop to make a position “fit” converts a sizing exercise into a hope.
Margin required and utilisation
Margin is not risk. Margin is collateral. A tight stop on a large contract can put a lot of collateral behind a small risk; a wide stop on a small contract can put little collateral behind a large risk. Watching only the margin figure flatters a position that is genuinely dangerous, and watching only the risk figure hides the fact that one more adverse gap could trigger a margin call.
As a rough working rule, keeping margin utilisation under about 30% on a single position leaves room for the exchange to raise margin without forcing you to liquidate into a move you wanted to hold through.
1R, 2R and 3R targets
R is your own risk on the trade, measured from entry to stop. A 1R target is the price at which you make exactly what you are risking; 2R makes twice that. Framing targets in R rather than in absolute price does two useful things: it makes targets comparable across instruments, and it forces the question of whether the trade is worth taking at all. A setup offering 0.8R to the first obvious resistance is not a setup, regardless of how good the entry looks.
Correlated positions are one position
This calculator sizes a single position. If you later add a second contract that moves with the first — two products driven by the same underlying market, two expiries of the same curve — the two risk budgets do not stay separate. Holding two positions at 1% each is, in practice, one position at roughly 2%. Treat the sum as the number that matters.
Common mistakes this page is designed to prevent
- Using price distance as the risk figure. A 30-point stop means nothing until it is multiplied. An index contract and a tonne-denominated commodity contract can share the same 30-point stop and differ by an order of magnitude in cash.
- Confusing the tick size with the tick value. The tick size is a price increment; the tick value is that increment converted to money. Mixing them up understates risk by exactly the multiplier.
- Rounding up. Sizing up to the nearest contract because “it nearly fits” quietly breaks the only rule the calculation exists to enforce.
- Forgetting that margin moves. Sizing to the edge of your available margin works until the exchange revises its requirement.