Lots in trading: standard, mini, micro and nano
- A standard lot is 100,000 units of the base currency, a mini lot 10,000, a micro lot 1,000 and a nano lot 100.
- Pip value is proportional to the number of lots: divide the size by ten and you divide the risk by ten.
- The right lot size comes from the risk you accept and the distance to your stop, never from how much you want to win.
On a trading platform, you do not pick an amount in dollars or euros, you pick a number of lots. It is the unit of position size in forex and on many CFDs. Misunderstand it and you end up taking ten or a hundred times more risk than you planned. Understand it and it becomes your first risk management tool.
The four lot sizes
A lot is a standardised quantity of the base currency. On EUR/USD, one standard lot means 100,000 euros bought or sold against dollars. Brokers offer fractions of a lot so retail traders can trade small sizes.
| Name | Lots | Units of base currency | Pip value on EUR/USD |
|---|---|---|---|
| Standard lot | 1.00 | 100,000 | $10 |
| Mini lot | 0.10 | 10,000 | $1 |
| Micro lot | 0.01 | 1,000 | $0.10 |
| Nano lot | 0.001 | 100 | $0.01 |
Most platforms, such as MetaTrader or cTrader, let you enter a size to the nearest hundredth of a lot: 0.01, 0.02, 0.15, 1.30 and so on. Nano lots only exist at some brokers, often on so-called cent accounts. Check the minimum size and the size step on the instrument's specification sheet.
How lots and pip value are linked
Pip value is directly proportional to the number of lots. If one standard lot is worth $10 per pip on EUR/USD, then 0.5 lot is worth $5 per pip, 0.25 lot $2.50 and 0.03 lot $0.30.
- Pair and move
- EUR/USD from 1.0850 to 1.0890, i.e. +40 pips
- With 1 lot
- 40 × $10 × 1 = $400
- With 0.25 lot
- 40 × $10 × 0.25 = $100
- With 0.05 lot
- 40 × $10 × 0.05 = $20
- With 0.01 lot
- 40 × $10 × 0.01 = $4
The market move is identical in all four cases. Only the position size changes the result, and it changes it in exactly the same proportions when you lose.
On pairs where the dollar is not the quote currency, the pip value for one lot is not exactly $10. On USD/JPY at 150.00, it is about $6.67; on EUR/GBP with GBP/USD at 1.2700, it is $12.70. The proportionality principle stays the same.
Notional value and margin
The notional value of a position is the total amount you are exposed to. For 1 lot of EUR/USD at 1.0850, it is €100,000 × 1.0850 = $108,500. You do not need that amount in your account, thanks to leverage: the broker only asks you for margin, a deposit held as collateral.
- Notional value
- $108,500
- Maximum retail leverage on a major pair (ESMA, FCA, ASIC)
- 30:1
- Calculation
- $108,500 ÷ 30
- Margin required
- $3,616.67
Level 2 of the Academy explains in detail how margin and margin calls work.
Choosing your lot size
Disciplined traders always start from risk. First you decide how much you are willing to lose if your stop loss is hit, as a percentage of capital, often between 0.5% and 2%. Then you measure the distance to your stop in pips. The lot size follows from that.
- Capital
- $10,000
- Risk accepted
- 1%, i.e. $100
- Stop loss distance
- 20 pips
- Pip value for 1 lot
- $10
- Calculation
- $100 ÷ (20 × $10) = 100 ÷ 200
- Position size
- 0.50 lot
If the stop is hit, the loss will be 20 pips × $5 = $100, exactly 1% of capital, before spread and commissions.
With a smaller account, the reasoning is identical. For $2,000 of capital, 1% risk and a 40-pip stop, you get $20 ÷ (40 × $10) = 0.05 lot, or five micro lots. That is exactly the kind of account micro lots were made for.
Notice one important thing: the size depends on the stop distance. With the same capital and the same 1% risk, a 50-pip stop gives 0.20 lot and a 10-pip stop gives 1 lot. A wider stop does not increase your risk in money, it simply reduces the number of lots. The market and your analysis set the stop, and the size adapts.
The classic mistake is to do the opposite: pick a size that "feels right" first, say 1 lot, then place the stop wherever the loss stays bearable. The stop then ends up somewhere with no technical logic, and the slightest normal market move takes it out.
Position size calculator
This calculator applies the formula for you, currency conversion included. Get into the habit of using it before every trade: it is the step that separates controlled risk from a gamble.
Lots on other assets
- Gold: one lot is usually 100 ounces. A $1 move per ounce is worth $100 per lot, or $1 for 0.01 lot.
- Indices: sizes are often called contracts. A CFD contract on the DAX is frequently worth €1 per point, but the size varies by broker.
- Stocks: size is usually expressed as a number of shares, one unit being one share.
- Crypto: one lot can mean a whole Bitcoin, or a fraction of one depending on the broker.
Check your understanding
0 / 3Educational content, not investment advice. Leveraged trading carries a high risk of losing money rapidly: most retail investor accounts lose money on these products.