Portfolio heat (total open risk)
Portfolio heat is the total amount an account would lose if every open position were stopped out at once: the sum, over positions, of the distance to the stop times size times point value, often expressed as a percentage of equity. It caps combined risk where per-trade limits alone cannot.
Senzoukria · Glossary · Updated September 2026
At a glance
- Formula
- Σ |entry − stop| × contracts × point value
- As a share
- Heat ÷ equity
- Positions without a stop
- Have undefined heat
- Correlated positions
- Add up as one larger bet
Computing heat
For each open position, multiply the distance to its stop by the number of contracts and the point value, then add the results. A 30,000 dollar account holding three positions that each risk 300 dollars to their stops carries 900 dollars of heat, or 3% of equity. A per-trade rule of 1% is respected by every position, yet the account can lose 3% in one move if the positions fail together.
Heat falls as stops are raised behind winners: a position whose stop is past its entry contributes no loss to heat, only a reduction of open profit.
Why correlation matters
Heat treats each stop as a separate event, but equity index futures often move together. A long ES and a long NQ position stopped on the same market drop are, in practice, one position in two tickets. A heat limit is more useful when correlated positions are grouped, or when the limit is set with the assumption that they will be stopped together.
- Group positions by the risk they share: same index family, same session driver, same news event.
- Count working entry orders that would add risk if filled.
- Treat any position without a stop as a limit breach until a stop exists.
In Senzoukria
The desktop does not compute an aggregated heat figure. The trading desk lists positions and working orders, the Protections panel shows the exit orders received for each position, and the chart draws order and position lines, which is enough to add the stop distances by hand. For prop firm accounts, the rules the firm enforces on combined exposure are the maximum contracts, which counts micros at one tenth of a mini in the desktop's rule engine, and the daily loss limit; the simulation checks both when you enter your account's rules.
Related
In the same section
- Position limits
- Poor high / low
- Point value
- Positive gamma regime
- Point of control
- Post-only order
- POC migration
- Pre-open and IOP
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Frequently asked questions
- What is a reasonable heat limit?
- It depends on the account's loss limits and on how correlated the positions are. A useful test is to ask what happens if all open positions are stopped on the same bar: the resulting loss should fit comfortably within the daily loss limit and the drawdown allowance.
- Does heat include open profit?
- Heat measures loss relative to entry if all stops are hit. When a stop is above the entry of a long position, that position risks only part of its open profit, not capital. Some traders track a second figure, the open profit at risk, for that reason.