Position Sizing: Quantity, Percent, Leverage, and Dollar Target
Position Sizing tells your bot how many contracts to open on each trade. Pick from four sizing modes in the Trade Entry card of the bot form.
The four sizing modes
- Quantity: the simplest mode. The bot attempts to open the exact number of contracts you enter, every time.
- Percent: the bot calculates the position's Regulation-T margin requirement, multiplies your percentage against the account's net liquidation value, and divides to get a quantity. The calculation does not account for other open positions or special margin arrangements on your account, such as portfolio margin.
- Leverage: the bot calculates the quantity needed to reach your specified leverage on the underlying.
- Dollar Target: you enter a whole-dollar trade size, such as 1000 for a $1,000 target, and the bot works out the quantity. Enter real dollars, not an option price.
Choosing a sizing mode
Each mode fits a different way of thinking about risk:
- Pick Quantity when you want predictability. Every trade is the same size, your risk per trade is easy to reason about, and nothing changes as your balance moves. It is the right starting point for a new bot: prove the configuration at one contract before scaling.
- Pick Percent when you want the bot to grow and shrink with the account. A bot sized at a fixed percent of net liquidation value automatically trades larger after gains and smaller after losses, without you editing anything.
- Pick Leverage when you think in terms of notional exposure to the underlying rather than margin, for example holding a steady 1.5x exposure regardless of the option prices that day.
- Pick Dollar Target when the trade cost or credit itself is the number you care about, such as always buying about $1,000 of a debit spread or collecting a consistent credit size across days.
How Dollar Target sizes a trade
At entry time the bot estimates the real-dollar value of one unit of the position from its quoted net credit or debit, then divides your target by that value. Credit and debit positions both use a positive target. Because the estimate comes from quotes taken just before the order is sent, the final filled value can vary slightly from the target; sizing is best-efforts.
Dollar Target Rounding decides what happens with the fractional result:
| Rounding | Behavior |
|---|---|
| Up | Targets at least your dollar amount based on quotes. |
| Nearest | Rounds to the closest whole quantity. |
| Down | Keeps the quoted trade value at or below the target, and skips the trade if the target is below the cost of a single unit. |
Include Credit
Include Credit applies to Percent sizing only. When enabled, the estimated credit received for opening a credit position offsets the buying power the bot assumes the trade requires, which sizes the trade slightly larger. When disabled, buying power for spreads and condors is based on the full spread width alone. The setting has no effect on single-leg positions.
Auto Size-Down
Auto Size-Down is a safety valve. If the bot projects that your available buying power cannot cover the margin requirement for the calculated quantity, it reduces the number of contracts instead of sending the full order. With it disabled, the bot always sends the calculated size and leaves it to your broker to reject an order that is too large.
Sizing for manual launches
Set Launch Now/Webhook Size controls what happens when a trade is started manually with the Launch Now button or remotely by a webhook. Enabled, the bot uses its configured sizing automatically. Disabled, tradeSteward asks you to set the size before the trade opens. Manual and remote launches are covered in Manage Your Bots and Control Bots Remotely with Webhooks.