What is a Lot in Forex Trading?

·

·

Like in any other financial transaction, whatever you buy and sell when trading forex CFDs has to be quantifiable – and that’s where lots come in. A lot, as used in CFD trading, is the predefined number of units of an asset that you buy or sell. 

The value of a lot in CFD trading is based on the account currency. The lots used in trading are the standard lot, mini lot, micro lot, and nano lot.

 Below is a breakdown of these lot sizes as used in Gold and Oil CFD trading.

LotDesignationNumber of Units
Standard1 lot100,000
Mini0.1 lot10,000
Micro0.01 lot1,000
Nano0.001 lot100

Standard Lot

In trading, one standard lot means 100,000 units of the currency used in one’s trading account. If the account is based on the USD, then trading one standard lot means buying an asset worth $100,000. For example, if you buy 1 lot of XAUUSD or XBRUSD, it means you’re buying Gold and Brent Oil CFDs worth $100,000.

With one standard lot, the value of one pip of XAUUSD and XRBUSD is worth $10.

Mini Lot

One mini lot, or 0.1 Lot, is the equivalent of 10,000 units of the trading account’s currency. For a USD-based account, one mini lot is the equivalent of US $10,000. For example, if you buy 0.1 lot of XAUUSD or XBRUSD, it means you’re buying Gold and Brent Oil CFDs worth $10,000.

With one mini lot, the value of one pip of XAUUSD and XRBUSD is worth $1.

Micro Lot

When trading CFDs, one micro lot, or 0.01 Lot, represents 1000 units of the trading account’s currency. If your trading account is in USD, then one micro lot is the equivalent of US $1,000. Hypothetically, if you were to buy 0.01 lot of XAUUSD or XBRUSD, it means you’re buying Gold and Brent Oil CFDs worth $1,000.

Note that when trading one mini lot, the value of one pip of XAUUSD and XRBUSD is worth $0.1.

Nano Lot

The nano lot, or 0.001 Lot, is the smallest possible unit that can be traded in the forex market. One nano lot represents 100 units of the trading account’s currency. If your account’s base currency is USD, then one nano lot is the equivalent of $100. So, if you were to buy 0.001 lot of XAUUSD or XBRUSD, it means you’re buying Gold and Brent Oil CFDs worth $100.

And in this case, the value of one pip of XAUUSD and XRBUSD is worth $0.01. However, note that some CFD brokers rarely offer trading accounts with nano lots.

Gold (XAUUSD) and Oil (XBRUSD) Trading Signals

Interested in taking your trading to the next level? Empirica Signals is one of the most profitable trading channels on Telegram, averaging over 1000 net pips a month. And don’t just take our word for it, contact us to start your free trial today!

We take a disciplined approach to our trading and never chase losing trades – if any trade doesn’t meet our entry criteria, we call it a day. This commitment to risk management helps safeguard your trading account. With Empirica Signals, you enjoy consistently profitable trades, 24/7 trading support, a money-back guarantee, and PayPal buyer protection.

FAQs

What is a lot in trading?

Lot, as used in trading, means the predefined units of an asset that you buy or sell. In CFD trading, lots are categorized as standard lots, mini lots, micro lots, and nano lots. Note that the value of a lot in trading is based on the account currency.

What is a standard lot in Forex?

One standard lot means 100,000 units of the currency used in one’s trading account. If the account is based on the USD, then trading one standard lot means buying an asset worth $100,000.

What is a mini lot in Forex?

One mini lot, or 0.1 Lot, is the equivalent of 10,000 units of the trading account’s currency. For a USD-based account, one mini lot is the equivalent of US $10,000.

What is a micro lot in trading?

One micro lot, or 0.01 Lot, represents 1000 units of the trading account’s currency. If your trading account is in USD, then one micro lot is the equivalent of US $1,000.

What is a nano lot in trading?

The nano lot, or 0.001 Lot, is the smallest possible unit that can be traded in the forex market. One nano lot represents 100 units of the trading account’s currency. If your account’s base currency is USD, then one nano lot is the equivalent of $100.