"Position" is a common term in financial trading, and it has different meanings in different contexts. In the futures contract trading market, a position specifically refers to the quantity of"Position" is a common term in financial trading, and it has different meanings in different contexts. In the futures contract trading market, a position specifically refers to the quantity of

Learn/Trading Guide/Futures/How to Calculate Futures Position Size

How to Calculate Futures Position Size

Author: MEXC

Sep 21, 2026MEXC

4 min

#Advanced

EL$0.001462-1.68%

LA$0.05917+4.52%

"Position" is a common term in financial trading, and it has different meanings in different contexts. In the futures contract trading market, a position specifically refers to the quantity of futures contracts bought or sold. For buyers going long, it is called holding a long position, and for sellers going short, it is called holding a short position. Before calculating the position size, we need to have a basic understanding of the concepts of long and short positions.

1. What Are Long and Short Positions?

Holding a long position refers to a situation where a trader believes that the market is likely to rise in the future. Consequently, they go long, purchasing a position (a specific quantity of futures contracts) known as a long position. After buying at a certain price, traders wait for the price to rise to their target level before selling the position to make a profit.

Holding a short position, on the other hand, occurs when a trader believes that the market is likely to fall in the future. In this case, they go short, selling a position (a specific quantity of futures contracts) known as a short position. After selling at a certain price, traders wait for the price to decrease to their desired target before buying back the position to realize a profit.

2. What is Risk Management?

Risk management involves preparing for the possibility of failure in any trade. For example, after holding a long position, if the market suddenly takes a downturn, you need to set an exit price. Exiting at this predetermined price, even if it means accepting a loss, defines the amount of money you are willing to risk – this is referred to as the risk amount. Incurring losses up to this risk amount is essential as it minimizes the risk, preventing your account from sustaining losses beyond what you can afford.

The setting of the exit price depends on individual trading principles and strategies, which can vary from person to person. It revolves around your trading methods and understanding of when the market has made a significant turn, prompting you to exit to cut your losses. It is crucial to note that the difference between the exit price and the entry price, as well as the absolute ratio between entry prices, are known as the stop-loss level.

Although trading methods differ among individuals, most traders set their risk levels between 0.5% to 2% of their account balance. This means that the risk amount for each trade is set between 0.5% to 2% of the total capital. By doing so, even in case of losses, there is a chance for recovery or subsequent profits.

In traditional financial trading markets, the 1% investment principle is commonly adopted, allowing a maximum risk of 1% for each trade. For instance, if your account size is $10,000, you can afford a risk amount of $100 per trade.

3. How to Calculate Position Size

The formula for calculating position size is as follows: Position Size = Risk Amount / Stop-Loss Level,

where Risk Amount = Position Size * Risk Level, and Stop-Loss Level = |(Entry Price - Exit Price)| / Entry Price.

Let's assume we have $10,000 in our account, and the risk level is 1%. So, the risk amount is $100.

Suppose we want to short Bitcoin at $26,000, setting our stop-loss exit price at $27,000, which represents a stop-loss level of 3.8%. In this scenario, the position size would be $100 / 0.038 = $2,631.

Similarly, if we were to go long at $26,000 with a stop-loss exit price at $25,000, also at a 3.8% stop-loss level, the position size would still be $2,631.

Therefore, our position size should be set at $2,631. If the price of Bitcoin reaches our short stop-loss price of $27,000 or our long stop-loss price of $25,000, we would incur a loss of $100.

Disclaimer: This information does not provide advice on investment, taxation, legal, financial, accounting, or any other related services, nor does it constitute advice to purchase, sell, or hold any assets. MEXC Learn provides information for reference purposes only and does not constitute investment advice. Please ensure you fully understand the risks involved and exercise caution when investing. The platform is not responsible for users' investment decisions.

Market Opportunity

ELYSIA Price(EL)

$0.001462

$0.001462$0.001462

+0.27%

USD

ELYSIA (EL) Live Price Chart

US Stocks Weekly on October.10-15 | CPI Hits 3.7% and Chips Lead the Drop; Why Does JPMorgan Say They Aren't Oversold?

This Week's Market: Inflation Reheats and Hike Bets Return September CPI rose 3.7% from a year earlier, up from 3.4% in August, and 0.6% on the month. Core CPI, which excludes food and energy, was up

Author: MEXC

2026-10-16

"Uptober" Hits a Wall: ETF Flows Reverse as 17,733 BTC Flood the Market — Buy the Dip or Run for the Exits? | MEXC Alpha Trader Weekly Research Report

Week 2 of October 2026 Statistics period: October 7 – October 13, 2026 Data cutoff: October 13, 2026 Core Narrative Over the past week, the crypto market went through a full cycle of an early-October

Author: MEXC

2026-10-14

October Rate Hike Odds Collapse From 70% to 14% — Is BTC Headed to $93,700 or $82,500? | MEXC Alpha Trader Research Weekly

First Week of October 2026 Settlement Period: September 30, 2026 – October 6, 2026 Data Cutoff: October 6, 2026 Core Narratives Over the past week, the crypto market experienced a dip followed by a

Author: MEXC

2026-10-08

MEXC vs P2B: How Do You Hedge 50,000 USDT of BTC Without a Futures Market?

P2B lists no futures, so cutting exposure on 50,000 USDT of BTC means selling and buying back for 200 USDT in fees, against 20 USDT to open and close a BTCUSDT short on MEXC or 50 USDT for the same

Author: Sarah Chen

2026-10-05