On an options scalp, your stop is on the option's premium, and every contract controls 100 shares' worth of movement. So position sizing means working backward from the dollars you're willing to lose to the number of contracts — never forward from “how many can I afford.”

The formula

Your dollar risk per contract is the premium distance to your stop, times 100:
risk per contract = (entry premium − stop premium) × 100.
Then: contracts = (dollars you'll risk) ÷ (risk per contract). Example: you'll risk $200, you buy at $1.30 with a stop at $0.90 → risk per contract = (1.30 − 0.90) × 100 = $40 → you can trade 5 contracts (5 × $40 = $200). The stop distance and your risk budget set the size; you don't guess.

Why you work backward

The wrong way — “I have $2,000 buying power, I'll buy $2,000 of options” — ignores the stop entirely and takes wildly variable risk. Working backward from a fixed dollar risk (your 1% or so) keeps every trade's risk constant regardless of the option's price, which is the whole point of position sizing (see fixed-dollar vs fixed-contract).

Size isn't “how many can I buy?” It's “how many keep my loss at my number if the stop hits?” Solve backward, every time.

The 0DTE reality

Because a 0DTE option is heavily leveraged and can move fast, small premium moves are big dollar moves — so this math matters more, not less. Note also that a same-day option can gap or the spread can widen, so the realized loss can exceed the intended stop (build in a cushion — see why a dollar stop beats a percent stop). This backward-from-risk sizing is exactly what NoVo does automatically: it maps your dollar risk to a contract count and attaches the stop before the order fills.