What the worksheet is for

The usual sizing sum takes the money you are willing to lose, divides it by the distance from entry to stop, and calls the answer your share count. That sum assumes the stop fills exactly at its price. It rarely does. A stop becomes a market order when it triggers, so it fills at whatever bids are there, and if the stock opens beyond your stop after news, the fill comes at the open, which can be a long way past it.

So the worksheet does the standard sum with one change, adding expected slippage to the per-share risk before dividing, and then shows two things the standard sum hides: what the spread costs you over a round trip, as a share of the risk you planned, and what the loss would be in a gap of the size you enter.

How each line is calculated

Risk budget = account value × risk percentage.
Risk per share = distance from entry to stop + expected stop slippage.
Shares = risk budget ÷ risk per share, rounded down to a whole share.
Spread cost = shares × spread, since you cross roughly half the spread going in and half coming out.
Gap exit = the stop price moved further against you by the gap percentage. Gap loss = shares × distance from entry to that exit.
R = a loss divided by the risk budget. A gap loss of 2R means twice what you planned to lose.

Choosing the inputs honestly

Nobody can tell you the right slippage or gap figure for your stock, and this page does not pretend to. Take them from your own records. Your fills on past stops show how far they typically landed from the trigger price, and the stock's own history of opening moves after earnings shows what a bad gap has looked like. If you have no records yet, run the sheet with a few different gap sizes and see where the loss stops being survivable. That number is the one worth knowing before you buy.

The tips on where stops cluster and on halts in small caps explain why the gap line matters. Why a stop sells below its price covers the slippage line, and the stop-limit order page covers the trade-off you take on if you try to cap it.

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