Standard lot size
Family III · Risk
Not to be confused with lot, lot sizes, position size.
Standard lot size is the conventional benchmark unit of trade volume in the foreign exchange market, representing 100,000 units of the base currency. It serves as the reference point from which other lot categories, such as mini, micro, and nano lots, are defined. The actual contract size attached to a standard lot is set by the broker or venue and can vary.
Contract size and pip value
In most retail forex contexts, one standard lot equals 100,000 units of the base currency. For a pair quoted to four decimal places, one pip is 0.0001, so the pip value in the quote currency is 100,000 × 0.0001 = 10 units of the quote currency. For pairs quoted to two decimal places, such as those involving the Japanese yen, one pip is 0.01, giving a pip value of 1,000 units of the quote currency. These figures are illustrative; the exact pip value depends on the contract size and the quote convention used by the broker.
Worked example: pip value for a standard lot
Assume a broker defines one standard lot as 100,000 units of the base currency. The trader holds one standard lot of EUR/USD, quoted at 1.1050.
Variation across brokers and instruments
The 100,000-unit convention is widespread in spot forex but is not universal. Some brokers define a standard lot differently, and in other asset classes the term may refer to a different quantity entirely. For example, a standard lot in gold or oil can represent a different number of ounces or barrels. Traders should confirm the contract size specified in the broker's product schedule before calculating position sizes or risk.
Often confused with
- lot
- A lot is the generic unit of trade size, whereas a standard lot is one specific, conventionally sized lot of 100,000 units; the visible sign is that a lot can be any size, while a standard lot has a defined benchmark quantity.
- lot sizes
- Lot sizes are the set of available volume categories, such as standard, mini, micro, and nano, while a standard lot is a single category within that set; the visible sign is that lot sizes are plural and comparative, whereas a standard lot is one fixed denomination.
- position size
- Position size is the total exposure a trader chooses for a specific trade, expressed in lots or units, while a standard lot is a fixed contract unit used to measure that exposure; the visible sign is that position size varies per trade, whereas a standard lot is a constant benchmark.