Position Sizing

The process of deciding how much capital to allocate to an investment idea, typically weighted by conviction, expected risk/reward and portfolio-level risk constraints.

Go deeper

This term comes up constantly in hedge fund interviews and on the desk.

Hedge Fund interview prep

Related Hedge Fund terms

Go further than reading

The written material is free. These are the ways to get it applied to your own work.

Browse the full glossary — 150+ finance recruiting and technical terms, in plain English.