Doubts in position sizing for equity cash

Trading
1

Let say i want to take a trade in a company x.

The current price of the shares of the company is Rs 211.05…

Let say,
According to my set up a shorting opportunity is created:-

Entry price :- Rs 211.05

Stop loss :- Rs 212.10

Risk per share :- Rs 1.05

Account capital :- Rs 10,000

Risk per trade :- 1% = Rs100

So, according to risk management -

no of shares to buy :- 100/1.05 = 95 shares(appr.)

So, position sizing :- 95* entry price
= 95* 211.05
= Rs 20,049

Now the question is how can be my position sizing is greater than my account capital…

Please i need to clarify this , i am looking for the answer for a long time but didn’t get it…
Please i need a full clarification…
@ShubhS9

You replies can make wonders… I appreciate your replies :pray::pray::pray::pray:

2

You can try this, divide your capital by price of stock.

10,000 / 211 = 47.39.

You can purchase 47 shares with your capital, risk 1% of your capital ie. Rs. 100 on this 47 shares.

100 / 47 = 2.1 (this is how much you will risk per share).

1 Like
3

One things to look for here, is whether the trade is intraday or positional.
If Intraday then you will get leverage.

So you will have to pay less than even 10k.

4

check out this post - Calculating Position size