Lot sizes
Family III · Risk
Not to be confused with lot, forex lot size, lot size in house.
Lot sizes are standardised trade quantities that determine the number of units of a base asset in a single transaction. They are a core input for position sizing, margin requirements, and pip value calculations. The term covers several classifications, such as standard, mini, micro, and nano lots, whose exact unit counts vary by instrument and broker.
Common classifications
Lot sizes are typically grouped into categories. The table below shows widely used classifications for spot forex, though the exact number of units per lot can differ by broker, instrument, and regulatory jurisdiction.
- Standard lot — commonly 100,000 units of the base currency.
- Mini lot — commonly 10,000 units.
- Micro lot — commonly 1,000 units.
- Nano lot — commonly 100 units, where offered.
For other instruments, such as indices or commodities, a lot may represent a fixed contract size rather than a currency unit count. Always confirm the contract specification with the broker or exchange.
Worked example: pip value for different lot sizes
Assume a trader holds a long position in EUR/USD with an account denominated in USD. The pip value for a standard lot is calculated as: (0.0001 / 1.1000) × 100,000 = 9.09 USD per pip. The table below shows the pip value for each lot size at the same exchange rate.
The pip value scales linearly with the lot size. This relationship allows traders to adjust position size to control risk per pip.
Margin and leverage implications
Lot size directly affects the margin required to open a position. Margin is typically calculated as a percentage of the notional value of the trade, which is the lot size multiplied by the current price. For example, a standard lot of EUR/USD at 1.1000 has a notional value of 110,000 USD. If the margin requirement is 2%, the required margin is 2,200 USD. Higher leverage reduces the margin requirement but increases the potential loss relative to the account balance. Margin requirements and leverage limits vary by broker and regulator.
Often confused with
- lot
- A lot is the generic unit of trade quantity, while lot sizes refers to the specific standardised categories such as standard, mini, or micro; the visible sign is that 'lot' is a single quantity, whereas 'lot sizes' is a set of classifications.
- forex lot size
- Forex lot size is the specific unit count for a currency pair, while lot sizes is the broader term covering multiple asset classes and classifications; the visible sign is that 'forex lot size' always relates to currencies, whereas 'lot sizes' can apply to any instrument.
- lot size in house
- Lot size in house refers to a proprietary or internal lot definition used by a specific broker or platform, while lot sizes generally refers to standardised industry classifications; the visible sign is that 'in house' indicates a non-standard, firm-specific quantity, whereas 'lot sizes' implies widely recognised categories.