Float Percent Units: Stock Calculator Model

Why? The Float Percent Units Money Management Model, it calculates the number of shares to purchase given a specified percentage amount of your capital that you are willing to risk. It differs from the “Fixed Percent Risk” Model as it doesn’t take the stop price in consideration.

Stock Calculation

Float Percent Units Money Management Model Formula: Quantity of shares to Purchase = (Total Capital * Float Percentage) / (Current Stock Price)

If I have $X dollar capital, I can multiply it with a percentage figure representing my investment float divided by the stock price and this will give me a recommended amount of stocks to purchase based on this particular model.

Inputs

• Stock Price
• Stop Price (Exit Price)
• Total Capital you have available to trade/invest.
• Float (%): Percentage of your Capital you are prepared to risk (lose) as a worst case scenario

Outputs

• Quantity of Stocks to Buy
• The value of Capital you will invest (typically equal to or less than the Capital you have available)

Float Percent 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

INPUTS:
Model Used : Float Percent Units
Position Type : Long
Price : $ 21.11
Stop : $ 20.10
Profit Target : $ 23.34
Total Capital : $ 16,000.00
Percent Float : 20 %

OUTPUTS:
Quantity : 151
Position Size : $ 3,187.61
Capital Risk : $ 152.51
Theoretical Profit : $ 336.73
Risk Reward Ratio: 2.2079

Leveraged Standard Transaction

INPUTS:
Model Used : Float Percent Units
Position Type : Long
Price : $ 21.11
Stop : $ 20.10
Profit Target : $ 23.34
Total Capital : $ 16,000.00
Percent Float : 20 %
Leverage : 5 %

OUTPUTS:
Quantity : 3,031
Position Size : $ 3,199.22
Capital Risk : $ 3,061.31
Theoretical Profit : $ 6,759.13
Unleveraged Value: $ 63,984.41
Risk Reward Ratio: 2.2079

Transaction with a Flat Commission Fee

INPUTS:
Model Used : Float Percent Units
Position Type : Long
Price : $ 21.11
Stop : $ 20.10
Profit Target : $ 23.34
Total Capital : $ 16,000.00
Percent Float : 20 %
Brokerage Fee $ 19.95

OUTPUTS:
Quantity : 151
Position Size : $ 3,187.61
Capital Risk : $ 152.51
Theoretical Profit : $ 336.73
Risk Reward Ratio: 2.2079
Break Even Price: $ 21.37

Leveraged Transaction with a Flat Commission Fee

INPUTS:
Model Used : Float Percent Units
Position Type : Long
Price : $ 21.11
Stop : $ 20.10
Profit Target : $ 23.34
Total Capital : $ 16,000.00
Percent Float : 20 %
Leverage : 5 %
Brokerage Fee $ 0

OUTPUTS:
Quantity : 3,031
Position Size : $ 3,199.22
Capital Risk : $ 3,061.31
Theoretical Profit : $ 6,759.13
Unleveraged Value: $ 63,984.41
Risk Reward Ratio: 2.2079
Break Even Price: $ 21.11

Transaction with Different Brokerage Fees on Buy/Sell

INPUTS:
Model Used : Float Percent Units
Position Type : Long
Price : $ 21.11
Stop : $ 20.10
Profit Target : $ 23.34
Total Capital : $ 16,000.00
Percent Float : 20 %
Brokerage Fee $ 19.95 / 0.1 %

OUTPUTS:
Quantity : 151
Position Size : $ 3,187.61
Capital Risk : $ 152.51
Theoretical Profit : $ 336.73
Risk Reward Ratio: 2.2079
Break Even Price: $ 21.27

Leveraged Transaction with Different Fees on Buy/Sell

INPUTS:
Model Used : Float Percent Units
Position Type : Long
Price : $ 21.11
Stop : $ 20.10
Profit Target : $ 23.34
Total Capital : $ 16,000.00
Percent Float : 20 %
Leverage : 5 %
Brokerage Fee $ 19.95 / 0.1 %

OUTPUTS:
Quantity : 3,031
Position Size : $ 3,199.22
Capital Risk : $ 3,061.31
Theoretical Profit : $ 6,759.13
Unleveraged Value: $ 63,984.41
Risk Reward Ratio: 2.2079
Break Even Price: $ 21.14