F&O Risk–Reward Analyzer
Analyse potential risk, reward, risk-reward ratio, breakeven, position size and capital exposure before taking an F&O trade.
Risk vs Reward
Trade Levels
Capital Risk Check
Position Summary
*Theoretical win rate required to break even over many trades when gains and losses are assumed to match the calculated reward and risk and trading costs are ignored.
What This Means
The StockMaster Universe F&O Risk–Reward Analyzer is a practical trading tool designed to help futures and options traders evaluate a trade before entering a position. Instead of focusing only on the potential profit, the calculator helps traders compare the amount they could risk against the potential reward at their selected target.
Risk-reward analysis is an important part of disciplined trading because a trade should be evaluated not only by its expected direction but also by how much capital could be lost if the trade moves against the trader.
What Is Risk–Reward Ratio?
The risk-reward ratio compares the potential loss of a trade with its potential profit.
For example, if a trader is willing to risk ₹1,000 to potentially make ₹2,000, the trade has a 1:2 risk-reward ratio.
A favourable risk-reward ratio does not guarantee that a trade will be profitable. A trade with a 1:3 ratio can still lose if the stop-loss is hit.
The purpose of the ratio is to help traders understand whether the potential reward is large enough compared with the amount being risked.
How to Use the Risk–Reward Analyzer
Enter the following details:
- Trade direction
- Entry price
- Stop-loss price
- Target price
- Lot size or quantity
- Trading capital
- Estimated trading costs
- Maximum risk percentage
The calculator then analyses the position and provides a detailed risk-reward breakdown.
What Does the Calculator Calculate?
The StockMaster Universe Risk–Reward Analyzer calculates:
- Potential risk
- Potential reward
- Risk-reward ratio
- Risk per unit
- Reward per unit
- Risk as a percentage of capital
- Reward as a percentage of capital
- Position value
- Breakeven after costs
- Maximum permitted risk
- Required theoretical win rate
- Capital risk status
This gives traders a more complete picture of the proposed trade.