BEFORE YOU BUY
How much should
you trade?
Enter your account and trade details.
See how many shares or contracts
fit the limits you choose.
Your trade details
WHAT IF THE NEXT TRADES LOSE?Run a risk-of-ruin simulation
See how long your account could last using your chosen loss limit. Start with a losing streak, or add wins and losses.
Uses the risk amount entered here on every trade, not the planned loss of a specific stock position. Dollar risk stays fixed; percentage risk is recalculated from the remaining balance.
Results update automatically.
What this test assumes
This is an educational risk-budget model, not a forecast or a stock/options pricing model. Every loss uses the full risk amount; wins earn the selected multiple of that amount. Trades happen one at a time, with no fees, gaps, slippage, minimum trade size, spending cap or overlapping positions.
A run stops at or below your chosen balance, or when cash cannot fund the next full fixed-dollar risk. Fixed-dollar balances are rounded to cents after each outcome. Stopped balances are held constant for the rest of the chart. The losing-streak count is the number of losses to that event; it may be beyond the number of trades shown.
With less than 100% of remaining equity at risk, the ideal percentage model never reaches exactly $0 in a finite losing streak. A low balance can still be practically unusable. Dollars and percentages therefore give different answers after losses.
The wins-and-losses view uses 2,000 hypothetical paths with independent outcomes and unchanged win-rate/payoff estimates. The same random draws are reused for comparable inputs. The wins-and-losses chart shows the average balance across all simulated accounts, including accounts that stopped. It does not show the path of any one account. A sample with no stopped runs does not prove the true risk is zero.
CME Group: losses and account size ↗ · Investor.gov: hypothetical performance ↗
How does this calculator work?
It checks two different limits.
Your planned loss limit controls how much the trade could lose under your assumptions. Your spending limit controls the amount you put into buying it. The calculator uses whichever allows fewer whole shares or contracts.
A quick example
With $50,000, a 2% planned loss limit is $1,000 and a 10% spending limit is $5,000. A stock bought at $100 with a planned sell price of $92 has $8 of planned loss per share. The $5,000 spending limit allows 50 shares, with $400 of planned loss.
Options you buy count at their full cost.
A contract quoted at $8.85 usually costs $885 with a 100-share contract. It can expire worthless, so the full $885 counts toward the loss limit. When buying shares and options together, we set aside the options’ cost first, then work out how many shares still fit.
One rule, using the prices you enter.
Stock planned loss is the number of shares × (buy price − planned sell price). For purchased options, it is the full contract cost. When you select Both, we add them together. Use this calculator for the whole trade idea; it does not track positions you already own.
This version supports standard 100-share option contracts only. Adjusted contracts with a different share count are not supported.
This calculator implements the TTI framework for long stock and purchased options. Inspired by Tom Sosnoff’s position-sizing discussion ↗. His premium-selling buying-power rules are different from the loss limits used here.