What Is a Lot in Trading?
What is a lot in trading? Learn what standard, mini and micro lots mean, how lot size sets your exposure and pip value, and why the same lot means different things across instruments.
A lot is the standard unit of position size. In currency trading one standard lot is 100,000 units of the base currency; smaller fractions are called mini and micro lots.
Key Takeaways
- On currency pairs, a standard lot is 100,000 units of the base currency. Mini = 10,000, micro = 1,000. In MT5 these are volumes of 1.00, 0.10 and 0.01.
- Lot size sets both your exposure and your pip value. Doubling the lot doubles both.
- The margin you post depends on lot size and leverage together.
- A "lot" on gold, an index or a share is a different quantity. Check the contract specification before assuming.
How Lots Work
Currencies are not traded one unit at a time. The market standardises position sizes into lots so that prices, margin and profit or loss can be quoted consistently.
| Name | Units of base currency | MT5 volume | Pip value on EURUSD |
| Standard lot | 100,000 | 1.00 | $10.00 |
| Mini lot | 10,000 | 0.10 | $1.00 |
| Micro lot | 1,000 | 0.01 | $0.10 |
The last column is why lot size matters more than most beginners expect. Pip value scales directly with lot size. A 20-pip move is $200 on a standard lot, $20 on a mini and $2 on a micro. The chart looks identical in all three cases; the account does not.
Worked Calculation: Exposure, Margin and Risk by Lot Size
Take EURUSD at 1.0850 with 1:200 leverage.
| Lot size | Exposure | Margin posted at 1:200 | Loss on a 30-pip adverse move |
| 0.01 | €1,000 (~$1,085) | $5.43 | $3.00 |
| 0.10 | €10,000 (~$10,850) | $54.25 | $30.00 |
| 1.00 | €100,000 (~$108,500) | $542.50 | $300.00 |
Read the last two columns together. At every size, the 30-pip loss is more than half the margin posted. Leverage sets that ratio; lot size sets the absolute number. A trader with a $1,000 account choosing 1.00 lot has decided that an ordinary 30-pip move costs 30% of the account. The lot size is the decision.
(Illustrative at 1.0850, USD account, maximum leverage. Instrument leverage is set in the MT5 contract specification and may be lower.)
Lots on Other Instruments
The word "lot" carries over to CFDs, but the quantity behind it does not. One lot means something completely different on each asset class, and this is the most common sizing error new multi-asset traders make.
| Instrument type | What one lot typically represents |
| Currency pair | 100,000 units of base currency |
| Gold (XAUUSD) | 100 troy ounces |
| Crude oil | 1,000 barrels |
| Stock index | A set amount of account currency per index point |
| Single share | 1 share, or a fixed number of shares |
These are typical structures, not MarketsAll's figures. The exact contract size for every instrument is in its contract specification. Read it before the first trade on any new instrument — see commodity trading and stock CFD trading for how sizing works in each.
Why It Matters
Lot size is the one variable you fully control. The market decides direction and distance; you decide size. Position sizing is the discipline of choosing lot size from your account and your stop distance, rather than from habit or from what the platform allows.
Micro lots exist so that small accounts can take positions where a normal daily move is a small fraction of equity. The right lot size is not a matter of experience; it follows from the account size, the stop distance and how much of the account you are prepared to lose on one trade.
From risk to lot size, in three steps
Suppose you have a $2,000 account, are prepared to risk $40 on a trade, and your stop-loss is 25 pips away on EURUSD.
- Risk per pip you can afford: $40 ÷ 25 pips = $1.60 per pip
- Pip value per lot on EURUSD: $10
- Lot size: $1.60 ÷ $10 = 0.16 lot
That is the whole calculation a lot size calculator performs. The inputs — account, risk, stop distance — are yours; the output is the lot.
Risks Related to Lot Size
- Sizing to the maximum allowed. The platform permits a lot size; it does not recommend one.
- Carrying a lot size across instruments. 0.10 lot on EURUSD is €10,000 of exposure. 0.10 lot on an instrument with a different contract size is a different exposure entirely, and only the contract specification and the price tell you what it is.
- Fixed lot habits. Using the same lot on every trade ignores that stop distances differ, so risk per trade differs too.
What is the minimum lot size?
On most platforms, 0.01 — a micro lot of 1,000 units. MarketsAll's minimum and step volume per instrument are in the contract specification.
What lot size should a beginner use?
Small enough that a normal daily move is a small fraction of the account. For most retail accounts that means micro or mini lots. The right number comes from position sizing, not from a rule of thumb.
Is 1 lot the same on every pair?
It is 100,000 units of the base currency on every pair, but its value in your account currency and its pip value vary with the exchange rate.
Does lot size change the spread?
No. The spread in pips is the same; the cost in money scales with the lot size.
What does 0.01 mean in MT5?
A volume of 0.01 lot. On a currency pair with a 100,000-unit contract, that is 1,000 units of the base currency. On other instruments it is 0.01 of whatever the contract size is.
Related Terms
Pip · Margin · Leverage · Position sizing · Contract specification
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