Fixed Units: Default Stock Calc Model

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Why? The Fixed Units Money Management model is the most simple model which the majority of investors and traders use to calculate their position size. Knowing the price of the security and the number of units you would want to buy, you can determine how large your position size will be when you proceed with your transaction.

Stock Calculation

Fixed Units Money Management Model Formula:
Total Capital Investment = Quantity of Stocks * Stock Price
Your total capital investment for your stock trade is the number of stocks you plan to purchase multiplied by the stock price you plan to buy the stocks.

Inputs

• Quantity
• Stock Price

Outputs

• Position size: Value of stock investment/trade

Fixed Units Case Studies

Examples of the various calculations:
These examples exhibit the standard long trade calculation. (buy low, sell high) If you would like to calculate a short trade, simply select the "Short” button and input the relevant numbers.

• Standard Transaction (Default)
• Leveraged Standard Transaction
• Transaction with a Flat Commission Fee
• Leveraged Transaction with a Flat Commission Fee
• Transaction with Different Brokerage Fees on Buy/Sell
• Leveraged Transaction with Different Fees on Buy/Sell

Standard Transaction

INPUTS:
Model Used : Fixed Units
Position Type : Long
Quantity : 100
Price : $ 32.20
Stop : $ 30.00
Profit Target : $ 33.56

OUTPUTS:
Position Size : $ 3,220.00
Capital Risk: $ 220.00
Theoretical Profit : $ 136.00
Risk Reward Ratio: 0.6182

Leveraged Standard Transaction

INPUTS:
Model Used : Fixed Units
Position Type : Long
Quantity : 100
Price : $ 32.20
Stop : $ 30.00
Profit Target : $ 33.56
Leverage : 5 %

OUTPUTS:
Position Size : $ 161.00
Capital Risk: $ 220.00
Theoretical Profit : $ 136.00
Unleveraged Value: $ 3,220.00
Risk Reward Ratio: 0.6182

Transaction with a Flat Commission Fee

INPUTS:
Model Used : Fixed Units
Position Type : Long
Quantity : 100
Price : $ 32.20
Stop : $ 30.00
Profit Target : $ 33.56
Brokerage Fee $ 19.95

OUTPUTS:
Position Size : $ 3,220.00
Capital Risk: $ 220.00
Theoretical Profit : $ 96.10
Risk Reward Ratio: 0.4368
Break Even Price: $ 32.60

Leveraged Transaction with a Flat Commission Fee

INPUTS:
Model Used : Fixed Units
Position Type : Long
Quantity : 100
Price : $ 32.20
Stop : $ 30.00
Profit Target : $ 33.56
Leverage : 5 %
Brokerage Fee $ 19.95

OUTPUTS:
Position Size : $ 161.00
Capital Risk: $ 220.00
Theoretical Profit : $ 96.10
Unleveraged Value: $ 3,220.00
Risk Reward Ratio: 0.4368
Break Even Price: $ 32.60

Transaction with Different Brokerage Fees on Buy/Sell

INPUTS:
Model Used : Fixed Units
Position Type : Long
Quantity : 100
Price : $ 32.20
Stop : $ 30.00
Profit Target : $ 33.56
Brokerage Fee $ 19.95 / 0.1 %

OUTPUTS:
Position Size : $ 3,220.00
Capital Risk: $ 220.00
Theoretical Profit : $ 112.69
Risk Reward Ratio: 0.5122
Break Even Price: $ 32.43

Leveraged Transaction with Different Fees on Buy/Sell

INPUTS:
Model Used : Fixed Units
Position Type : Long
Quantity : 100
Price : $ 32.20
Stop : $ 30.00
Profit Target : $ 33.56
Leverage : 5 %
Brokerage Fee $ 19.95 / 0.1 %

OUTPUTS:
Position Size : $ 161.00
Capital Risk: $ 220.00
Theoretical Profit : $ 112.69
Unleveraged Value: $ 3,220.00
Risk Reward Ratio: 0.5122
Break Even Price: $ 32.43