Position sizing across instruments

EN source master · P06-L02 · 30 minutes estimated · needs_review

Offline formative study. No wallet connection, real funds, private keys, signatures, live trade or personal portfolio inputs. Visuals are specifications. This source master remains needs_review; completing the formative exercise does not issue certification.

Equal displayed quantities can represent very different exposure when contract multipliers and settlement conventions differ.

Preserve dimensional meaning

For a linear instrument, movement loss equals quantity×price movement×value factor [CME]. A spot-like fictional unit has factor1; the fictional linear contract has factor5 units per price point. Neither is a named tradable product. CME's settlement document explains why contract conventions and rounding must be checked; it does not supply this exercise's values.

Include stipulated costs

Our desk's assigned capacity is 120 units. Each linear contract has a 4-point adverse movement at factor5 plus3 units round-trip cost:23 units per contract. Whole-contract capacity is floor(120/23), not a fractional contract rounded upwards. The resulting number is a scenario solution, not a recommended position.

Stress the movement assumption

An8-point gap increases modeled contract loss to 43. The originally computed count can exceed capacity. Stop and hypothetical-fill limitations matter [CFTC]. A sizing formula only propagates assumptions; it cannot make them true.

Nonlinear conventions need another formula

For a separate fictional inverse contract, define signed settlement change for a long as q×F×(1/entry−1/exit) settlement units. It is a stipulated toy convention, not a real venue rule. Falling exit prices make that result negative. Do not multiply dollar price movement directly into settlement tokens. Real inverse specifications, collateral denomination, conversion price and rounding would need independent documentation before a real claim.

• Value factor: units of loss per price point per contract.
• Round-trip cost: stipulated total opening/closing cost.
• Whole-contract floor: greatest allowed integer within capacity.
• Inverse convention: settlement changes use reciprocal prices.

ILLUSTRATIVE linear desk capacity 120; adverse move4 points; factor5; cost 3/contract. Gap move8. Separate inverse toy q=2,F=100,entry100,exit80; fees excluded and explicitly unavailable. No real instrument symbol.

Order-book-style teaching table mapping price movement to value factor and cost; baseline 5 contracts versus stress215 loss. Inverse reciprocal formula in separate units panel; no executable orders.

Unit-consistent calculations under the two explicitly supplied conventions.

Actual venue lot size, fee schedule, guaranteed stop execution or suitable personal size.

• OBSERVED: FIX-P06-L02 stipulates factor5 and cost 3.
• INFERRED: baseline whole-contract count 5 fits capacity 120.
• UNKNOWN: actual venue rules and inverse fees.
• INSUFFICIENT EVIDENCE: this count is appropriate for a person's portfolio.

• Ignoring multiplier.
• Rounding quantity upwards.
• Reusing linear formula for inverse settlement.

Compute modeled count and unused capacity, then its gap loss. Calculate the inverse toy settlement change and explain why no real sizing claim is supported.

Deliver calculations or annotations, claim/source table and limitations. Suggested allocation: study 12 minutes, exercise 8, correction/quiz 10; estimate subject to calibration.

• Carry movement, factor and settlement units.
• Include declared costs.
• Apply whole-lot constraints.
• Recompute under gap stress.

Sizing is a unit-sensitive scenario calculation. Instrument conventions, costs and gaps can change its result materially.

• Carry instrument units through scenario sizing.
• Compare baseline capacity with fee and gap sensitivity.

P06-L03 after correction review.

NONE in the authoritative catalog. The supplied offline fixture/package is sufficient; no paid feature or unverified Production capability is required. Lab/certification metadata denotes downstream associations, not access gates or live awards.

• [CME] CME — Money calculations — Price change, quantity and contract value factor determine variation; rounding is contract-specific. Checked 2026-10-01; locator turn11view5.
• [CFTC] CFTC — Trading systems advisory — Hypothetical execution, cost and stop-order limitations; no profit guarantee. Checked 2026-10-01; locator turn12view1.