Lot size
Lot size is the standardised quantity of an instrument traded in a single position.
The conventions for forex are: standard lot (100,000 units of the base currency), mini lot (10,000), micro lot (1,000), and nano lot (100). Pip value scales linearly with lot size — halving the lot halves the pip value.
This page covers the mechanic; it is not trading advice.
Lot fractions in trading platforms
A 1 standard lot EUR/USD position controls 100,000 EUR. A 0.10 mini-lot position controls 10,000 EUR. A 0.01 micro-lot position controls 1,000 EUR. The notation in trading platforms reflects the lot fraction directly: 1.00, 0.10, 0.01.
Lot size determines the dollar value of every pip of movement and the margin held to open the position. Both scale linearly. Halving the lot halves both the pip value and the margin requirement; the leverage ratio is unchanged.
Lot size, pip value, and account scaling
Pip value scales linearly with lot size. For a USD account on EUR/USD at 1.0850:
1 standard lot (1.00) controlling 100,000 EUR: $10 per pip. 1 mini lot (0.10) controlling 10,000 EUR: $1 per pip. 1 micro lot (0.01) controlling 1,000 EUR: $0.10 per pip. 1 nano lot (0.001) controlling 100 EUR: $0.01 per pip.
Margin scales identically. At 1:30 leverage with EUR/USD at 1.0850, margin per lot fraction: 1.00 lot — $3,617 margin. 0.10 lot — $362 margin. 0.01 lot — $36 margin.
For a $5,000 account targeting 1% risk per trade ($50) on EUR/USD with a 25-pip stop-loss: position size = risk amount ÷ (stop distance × pip value per lot) = $50 ÷ (25 × $10) = 0.20 lots, or 2 mini lots.
The same calculation gives different sizes for different stop distances. A 50-pip stop on the same risk parameters gives 0.10 lots. A 10-pip stop gives 0.50 lots. Lot size is the variable that adjusts; account risk percentage and stop distance are the inputs that drive it.
Related terms
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Common questions
What is a fractional lot?
A fractional lot is any position size that is not a whole standard lot — 0.50 lots, 0.05 lots, 0.001 lots. Most retail brokers support trading in 0.01-lot increments (micro lots), and some support 0.001-lot increments (nano lots). Fractional lots are the practical mechanism by which retail traders apply position sizing rules to small accounts: a $1,000 account at 1% risk on a 30-pip stop-loss requires roughly 0.03 lots, which only a micro-lot-capable broker can execute.
What lot sizes do brokers offer?
Most retail brokers offer trading down to 0.01 standard lots (micro lots, 1,000 base currency units). Some offer 0.001 lot increments (nano lots, 100 units). The minimum lot size is set by the broker in the contract specifications for each instrument and may differ between major FX pairs and exotic pairs or commodities. Tighter stops on small accounts can require lot sizes below the broker's minimum, in which case the trade is mathematically not viable at the chosen risk percentage on that broker.