Calculator Panel
Calculation Ready
Enter your values above and click Calculate.
What This Calculator Does
This calculator measures risk parameters, showing exactly how much capital is lost if your stop-loss is triggered.
How to Use This Calculator
Input entry price, stop price, and number of shares. Click Calculate to view total dollar risk, trade risk percentage, and position cost basis.
How the Calculation Works
The underlying math engine processes your inputs using exact formulas. This systematic approach ensures professional, institutional-grade calculation precision:
Mathematical Formula
Formula Legend:
- · Entry Price = Buy price per share.
- · Stop Price = Exit stop-loss price per share.
- · Shares = Total shares purchased.
Practical Example
Suppose you buy 200 shares of a stock at $45.00 per share and place a stop-loss order at $41.00 per share:
Step-by-Step Mathematical Walkthrough:
- 1 Subtract stop price from entry price: $45.00 - $41.00 = $4.00 potential loss per share.
- 2 Multiply by shares: $4.00 * 200 shares = $800.00 total dollar risk.
- 3 Find trade-level risk percentage: $4.00 loss / $45.00 entry * 100 = 8.89%.
Important Assumptions & Notes
- Stop-loss triggers precisely at your specified price.
- The position is closed completely at the stop price.
Common Mistakes or Considerations
- Trading without a defined stop-loss, exposing the account to unlimited loss potential.
- Underestimating transaction costs when closing a trade.
Frequently Asked Questions
What is stop-loss risk?
The maximum amount of money you stand to lose on a stock trade if the price drops to your stop-loss level and triggers an automatic sale.
How do I calculate my total capital at risk on a trade?
Multiply the number of shares you purchased by the difference between your entry purchase price and your stop-loss price.
What is the difference between portfolio risk and trade risk?
Trade risk is the dollar loss of an individual trade hitting its stop-loss. Portfolio risk is that trade risk expressed as a percentage of your total account value (usually kept below 2%).
How does a stop-loss order help manage stock risk?
It provides a guaranteed exit point, preventing an emotional decision to hold a crashing stock and protecting you from catastrophic capital losses.
What percentage of my account should I risk on a single stock?
Most risk models recommend risking no more than 1% to 2% of your net account equity on any single stock trade.