
Standard Lot
A standard lot is the equivalent of 100,000 units of the base currency in a forex trade. A standard lot represents 100,000 units of any currency, whereas a mini-lot represents 10,000 and a micro-lot represents 1,000 units of any currency. With the advent of online brokers and increased competition, it is possible for retail investors to make trades in amounts that aren't a standard lot, mini-lot, or micro-lot. It is one of the three commonly known lot sizes; the other two are mini-lot and micro-lot. In the interbank market, where banks trade with each other on platforms such as Reuters and EBS, the standard trading size (or standard lot) is 1 million units in the base currency.

What Is a Standard Lot?
A standard lot is the equivalent of 100,000 units of the base currency in a forex trade. It is one of the three commonly known lot sizes; the other two are mini-lot and micro-lot.
In the world of finance, lot size refers to a measure of a quantity or increment of a particular asset or product which is deemed suitable for buying and selling. Different types of products are commonly available in different lot sizes. Historically, spot forex has only been traded in particular lots of 100, 1,000, 10,000, or 100,000 units. More recently, however, non-standard lot sizes are also available to forex traders.


Understanding a Standard Lot
A standard lot represents 100,000 units of any currency, whereas a mini-lot represents 10,000 and a micro-lot represents 1,000 units of any currency. A one-pip movement for a standard lot corresponds with a $10 change. For example, if you buy $100,000 against the Japanese yen at a rate of ¥110.00 and the exchange rate moves to ¥110.50, which is a 50 pip movement, you have made $500. Conversely, if the exchange rate falls 50 pips to ¥109.50 your net profit and loss are minus $500.
With the advent of online brokers and increased competition, it is possible for retail investors to make trades in amounts that aren't a standard lot, mini-lot, or micro-lot. For example, a nano-lot size consists of 100 units of a currency. In the interbank market, where banks trade with each other on platforms such as Reuters and EBS, the standard trading size (or standard lot) is 1 million units in the base currency.
Image by Sabrina Jiang © Investopedia 2020
Related terms:
Base Currency
The first currency quoted in a currency pair on forex. It is also typically considered the domestic currency or accounting currency. read more
Foreign Exchange (Forex)
The foreign exchange (Forex) is the conversion of one currency into another currency. read more
Forex Mini Account
A forex mini account allows traders to participate in currency trades at low capital outlays by offering smaller lot sizes and pip than regular accounts. read more
Forex (FX) , Uses, & Examples
Forex (FX) is the market for trading international currencies. The name is a portmanteau of the words foreign and exchange. read more
Lot (Securities Trading)
A lot is amount of securities bought in a single transaction on an exchange. read more
Micro Account
A micro account caters primarily to the retail investor who seeks exposure to foreign exchange trading but doesn't want to risk a lot of money. read more