The default rule: 1–2% of account on any single trade. On a $25,000 account, that's $250–$500 of risk per position. A long call with $300 of premium fits one contract; a vertical spread with $100 max loss fits 2–5 contracts. The calculator translates the rule into an actionable contract count for the structure you're considering.
Where the calculator is most useful: undefined-risk structures. A naked short put on a $200 stock has theoretical max risk of $20,000 per contract. Sizing that by the 1% rule against a $25,000 account means you should trade exactly zero contracts — the calculator will tell you that explicitly, before you fund the trade and discover the math the hard way.