Sizing & Risk
Portfolio heat calculator
“If every open position hit its stop at the same time, how much of the account would that cost?”
Position sizing answers one trade at a time. Portfolio heat asks the same question of the whole book at once: the sum of every open position's risk, as a percentage of the account. It also shows which position is carrying most of it, which is rarely the one that looks largest.
Free to use, nothing to sign up for, and nothing you type here is sent anywhere — the arithmetic runs in your browser.
What it computes
position risk = |entry - stop| x qty x point value total heat $ = SUM(position risk) heat % = total heat / account x 100 notional = qty x entry x point value (per row) gross exposure% = SUM(notional) / account x 100 share of heat = position risk / total heat x 100
What you type in
| Field | What it means | Example |
|---|---|---|
| Account size | The account the total is measured against. | $25,000 |
| Position rows | One per open position — a label, entry, stop, quantity and point value. | 3 rows |
Reading the result
- Heat % — the headline: the total at risk if every stop fills.
- Gross exposure % — total notional against the account. A leverage read, not a risk read.
- Share of heat, per row — concentration. One position carrying most of the total is what this column exists to show.
- Largest single risk, called out separately.
Worked example
A $25,000 account holding AAPL (100 shares, 190 to 185), MSFT (40 shares, 400 to 390) and one ES contract (5000 to 4980, point value 50).
- AAPL risk = 5 x 100 x 1 = $500 (26.3% of the heat)
- MSFT risk = 10 x 40 x 1 = $400 (21.1%)
- ES risk = 20 x 1 x 50 = $1,000 (52.6%)
- Total heat = $1,900 = 7.6% of the account
- Gross exposure = $285,000 = 1,140%, almost all of it the futures contract
The single ES contract is more than half the total risk while looking like the smallest line in the list. That inversion is the entire reason to run the calculation.
What trips people up
- Correlation is not modelled. Three tech longs stopping out together is one event, not three independent ones; heat treats them as a simple sum.
- A position with no stop cannot be included honestly — there is no risk number for it.
- Gross exposure and heat answer different questions. A futures book can have low heat and enormous exposure at the same time.
Questions
- What counts as too much heat?
- A total-heat cap around 6% is often cited in trading literature, and the tool displays your figure against that convention. It enforces nothing and recommends nothing — the number is arithmetic on the rows you enter.
- Can I include options or futures?
- Yes — put the contract multiplier in the point value column. An options position uses 100 per contract; a futures position uses its own multiplier.
Related calculators
These are the same calculators built into Ledger of Alpha, where they read your own trade history instead of numbers you re-type. See the full product
Keep the record these numbers come from
A free account logs the trades you size here, so the win rate and averages you type into these calculators come from your own history rather than a guess.