> For the complete documentation index, see [llms.txt](https://docs.force.xyz/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.force.xyz/trader-tools/position-sizing.md).

# Position Sizing

Answers the question the other way round from the DV01 calculator: *I am willing to lose this much if I am wrong. How big should the position be?*

<figure><img src="/files/FhVnwubcOB3wq5mw76RE" alt=""><figcaption></figcaption></figure>

## Inputs

| Field                  | Unit | What it means                                             |
| ---------------------- | ---- | --------------------------------------------------------- |
| **Dollar risk budget** | $    | The most you intend to lose on the move you are assuming. |
| **Move assumption**    | bps  | How far you assume the rate can go against you.           |
| **Leverage**           | x    | Your chosen leverage, up to the market maximum.           |

## Outputs

**Contracts**, the position size that risks exactly your budget on that move; **Notional**, its size at the current mark price; and **Margin**, the collateral required at your chosen leverage.

## The calculation

$$
\text{contracts} = \frac{\text{risk budget}}{\text{move (bp)} \times \text{DV01 per contract}}
$$

$$
\text{notional} = \text{contracts} \times \text{mark price}, \qquad
\text{margin} = \frac{\text{notional}}{\text{leverage}}
$$

Note that the contract count does not depend on the mark price or on leverage. Risk in a rate market is set by the size of the move and the number of contracts, not by the level of the rate. Price and leverage only determine what it costs to carry the position, not what it can lose.

Both the risk budget and the move assumption must be greater than zero, or the calculator returns nothing: a zero move assumption would imply an unbounded position.

## How to use it well

The move assumption is doing the real work, and it is a judgement about the market rather than a setting. The 10-year yield moves a few basis points on an ordinary day and can move twenty or more on a payrolls or inflation release. Sizing to a one basis point move produces a position twenty times larger than sizing to a twenty basis point move, and the same budget is gone in a single data print.

Leverage does not change the risk of being wrong, only the capital required to hold the position. Raising it frees collateral; it does not make the position safer.


---

# Agent Instructions
This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com.

## Querying This Documentation
If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter:

```
GET https://docs.force.xyz/trader-tools/position-sizing.md?ask=<question>&goal=<endgoal>
```

`ask` is the immediate question: it should be specific, self-contained, and written in natural language.
`goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal.

The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.